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Challenger Exploration: Stock Price Estimate at $4,000 Gold

Step 1: Production Estimate

- Annual production: 115,000 oz gold.

Step 2: Revenue Calculation

- Gold price: $4,000/oz.

- Revenue = 115,000 × 4,000 = $460,000,000 USD.

Step 3: Cost Calculation

- AISC: $850/oz.

- Costs = 115,000 × 850 = $97,750,000 USD.

Step 4: Free Cash Flow (FCF)

- FCF = Revenue - Costs.

- FCF = 460,000,000 - 97,750,000 = $362,250,000 USD.

Step 5: Valuation

- FCF multiple: 10x.

- Valuation = FCF × 10 = 362,250,000 × 10 = $3,622,500,000 USD.

Step 6: Stock Price Calculation

- Shares outstanding: 370M.

- Stock price = Valuation ÷ Shares outstanding.

- Stock price = 3,622,500,000 ÷ 370,000,000 = $9.79 USD.

Conclusion

If gold reaches $4,000/oz and Challenger Exploration meets its production goals, the estimated stock price is $9.79 per share.

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Disclaimer

The user RockeTeller has a position in ASX:CEL. Simply Wall St has no position in any of the companies mentioned. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If gold reaches $4,000 per ounce

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