It seems that I now have to run new prices into my spreadsheet for GG quite often to stay in touch with possible GG earnings at various price levels. Now that $700 has fallen, here is what the model spits out at 3 different price levels:
Gold $650, Copper $3.00
GG after tax EPS projects at: $1.50 per share on an one year forward basis once the 2 million ounces per year production kicks in.
Gold $700, Copper $3.00
GG after tax EPS projects at: $1.70 per share
Gold $750, Copper $3.00
GG after tax EPS projects at: $1.90 per share
My model shows cash cost per ounce as follows at various copper prices:
$2.75 lb = $60 per ounce
$3.00 lb = $38 per ounce
$3.50 lb = $0 per ounce (yes, ZERO)
Those costs were calculated by taking the actual cash costs per ounce in Q4 2005 and BUMPING THEM UP ABOUT 30% to account for higher fuel costs and new higher cost mines at Amapari and from PDG.
My earnings calculations also provided for about $70 million in interest expense on the loan to acquire the PDG mines. That may be lower because that loan may be paid off quicker than expected due to higher cash flows.
Listen up grasshoppers. When golddataseeker speaks, we listen. His spreadsheet model of GG earnings has been the best indication of what earnings will be bar none. The company would probably like to have him doing their guidance for them. Thanks again for sharing your work with us dataseeker. It's been invaluable.