How much would a Mining Co. pay for Golden Minerals?
I'll admit that I'm relatively naive when it comes to valuations. Entertain me a bit if you know more than me (good chance of that). Let's give it a shot:
Cash (as of 12/2012) $44 Mil.
Annual Revenue (2012) $26 Mil.
Property portfolio (???) $300 Mil.
Equipment (???) $20 Mil.
Premium/Other (???) $20 Mil.
Purchase price = $410 Mil/43 Mil shares = $9.5/share
Granted...they probably have less cash now...but production will be increasing. Help me with these figures if you have time. Golden Minerals is going to be bought-up very soon. The bigs will just wait a few more quarters...as Golden Minerals uses up some cash and increases production...then make an offer at get a steal. Probably not $9.5/share given current PM prices...probably in the range of $6-8/share...which I know a lot of people won't be happy with. But...if you think this valuation has any truth to it...we're talking at least a 4-bagger from the current price/share. Just sayin'...
From the asset side: add $5 for property sale to cash, but they are burning through $2M in cash a month, so subtract $8M from cash. That leaves $1 per share in cash at April 30th. Book value of non-cash assets is 5.60/share (properties, equipment, remaining goodwill). Total book is around $6.60 per share, so at 1.2 times book call it $8 a share. I'd be happy with $6.
I sure hope this happens soon rather than Mgmt. deciding to do another offering at these prices! Can you imagine how many shares they'd need to issue in order to raise some decent cash? I don't know if they have more they can issue though...perhaps it would require a vote? Any ideas?