So, If Joe can produce 28,000 ozs of Gold at an average sales price of $1275.00 that would be a $575.00 profit on 28k ozs or 16.1 million (based on a $700.00 production cost per oz.) Divide 16.1 million by 97.44 million shares and you 16.5 cents a share for the quarter or an annual rate of 66 cents. Even if you use a P/E of 10 you would have a share price of $6.60. Add the cash of $1.00 plus cash (cash per share, less debt) we have a $7.60 stock price. Lets Hope we have 28,000 ozs. @ $700.00 and we good.
Well, you should short all you can while the price is below the cost of production, that's usually the best time to do so. On a non-sarcastic note, I think it's more likely the price will remain somewhere between your $1000 price target and the $5000 one of the commenter below.
Also, as an added bonus, PPP reached the silver threshold on the contract with Silver Wheaton on April 22nd. PPP will be selling 50 percent of the silver from San Dimas at spot prices until August 5th. The second and third quarters may not be too bad, as PPP will sell between 900,000 and 1,000,000 ounces of silver at spot prices.
I am still looking for Joe to pull off other acquisition later this year, as many juniors and even larger miners are getting desperate to unload assets to raise funding. Gold and silver prices will not stay low for long, as a combination of amazing events later this year through 2015, will take gold to over $5,000 per ounce and silver to over $100 an ounce. The people are getting restless around the world, and civil unrest and war will drive precious metal prices through the roof. Also, interest rates are going to go dramatically higher, and it will force the FED's hand as the interest payments on the debt will spiral out of control. Europe's problems continue to worsen, and I would not be surprised to see major problems again for Greece, Spain, Portugal, Italy, and even France.
I just started adding to some of my current positions in the quality miners in my portfolio, and PPP is definitely the best of breed when you talk about junior miners with a plan to become an intermediate miner. Cash on the balance sheet, reserves and resources, cash-flow, and a superior management team will matter the most in weathering this storm. The storm is almost over, and we may have another leg down...who knows, but the risk to the downside is minimal compared to the rewards on the upside through 2016 and beyond.
Would love to see them take advantage of weakness in the sector to add additional projects since they seem to be one of the few miners that can bring them online on time and on budget. Hope they go after VGZ's Guadalupe de los Reyes project since it's right next to San Dimas and VGZ's too busy farting around with their Mt. Todd project in Australia to give it the attention it deserves.