If gold reaches $4,000 per oz

To calculate the potential stock price for Ausgold Ltd based on their Katanning project, we'll go through a structured approach similar to previous examples, focusing on projected revenue, costs, free cash flow, and market valuation.

Step 1: Production Forecast and Revenue Calculation

1. Projected Production:

• Annual Production: 130,000 oz (based on the Pre-Feasibility Study).

2. Projected Revenue:

Assuming a gold price of $4,000 per oz:

• Revenue Calculation:

Revenue=Total Production×Gold Price=130,000 oz×4,000 USD/oz=520,000,000 USD\text{Revenue} = \text{Total Production} \times \text{Gold Price} = 130,000 \, \text{oz} \times 4,000 \, \text{USD/oz} = 520,000,000 \, \text{USD}Revenue=Total Production×Gold Price=130,000oz×4,000USD/oz=520,000,000USD

Step 2: Cost Calculation

1. Cash Costs:

Projected cash costs are $800 per oz.

• Total Costs:

Total Costs=Total Production×Cash Costs=130,000 oz×800 USD/oz=104,000,000 USD\text{Total Costs} = \text{Total Production} \times \text{Cash Costs} = 130,000 \, \text{oz} \times 800 \, \text{USD/oz} = 104,000,000 \, \text{USD}Total Costs=Total Production×Cash Costs=130,000oz×800USD/oz=104,000,000USD

Step 3: Free Cash Flow Estimation

1. Free Cash Flow Calculation:

FCF=Revenue−Total Costs=520,000,000−104,000,000=416,000,000 USD\text{FCF} = \text{Revenue} - \text{Total Costs} = 520,000,000 - 104,000,000 = 416,000,000 \, \text{USD}FCF=Revenue−Total Costs=520,000,000−104,000,000=416,000,000USD

Step 4: Valuation Based on FCF

Using a 10x multiple on free cash flow for valuation:

Market Cap=FCF×10=416,000,000×10=4,160,000,000 USD\text{Market Cap} = \text{FCF} \times 10 = 416,000,000 \times 10 = 4,160,000,000 \, \text{USD}Market Cap=FCF×10=416,000,000×10=4,160,000,000USD

Step 5: Estimate Stock Price

Assuming Ausgold has approximately 500 million shares outstanding (this is an estimate; please adjust based on actual share count):

1. Stock Price Calculation:

Stock Price=Market CapShares Outstanding=4,160,000,000500,000,000≈8.32 USD\text{Stock Price} = \frac{\text{Market Cap}}{\text{Shares Outstanding}} = \frac{4,160,000,000}{500,000,000} \approx 8.32 \, \text{USD}Stock Price=Shares OutstandingMarket Cap​=500,000,0004,160,000,000​≈8.32USD

Conclusion

If gold reaches $4,000 per oz and Ausgold Ltd successfully ramps up to an annual production of 130,000 oz, the estimated stock price could be around $8.32 per share. This reflects the significant value of their Katanning project and potential future upside if resources expand or lithium targets are developed.