(Complete Analysis) 87,000% ROI - At gold $4,000/oz, silver $100/oz

ANALYSIS 1

GoGold Resources: Refined Stock Price Analysis

Key Assumptions:

1. Production Projections:
   • 2027: 8M AgEq oz.
   • 2028: 15M AgEq oz.
2. Silver-Gold Split (AgEq):
   • 80% from silver.
   • 20% from gold.
3. Metal Prices:
   • Gold: $4,000/oz.
   • Silver: $100/oz.
4. Costs:
   • AISC: $20/oz AgEq.
5. Shares Outstanding:
   • 200M shares fully diluted.
6. FCF Multiple:
   • Conservative: 7x.
   • Optimistic: 10x.

Step 1: Revenue Calculation for 2028

1. Gold Contribution (20% of 15M AgEq oz):
   • Gold Production = 15M x 0.20 = 3M oz.
   • Gold Revenue = 3M x $4,000 = $12B USD.
2. Silver Contribution (80% of 15M AgEq oz):
   • Silver Production = 15M x 0.80 = 12M oz.
   • Silver Revenue = 12M x $100 = $1.2B USD.
3. Total Revenue:
   • Total Revenue = $12B + $1.2B = $13.2B USD.

Step 2: Free Cash Flow (FCF)

1. Total Costs:
   • Total Costs = 15M x $20 = $300M USD.
2. FCF:
   • FCF = $13.2B - $300M = $12.9B USD.

Step 3: Valuation

1. Market Cap:
   • Conservative (7x FCF): $12.9B x 7 = $90.3B USD.
   • Optimistic (10x FCF): $12.9B x 10 = $129B USD.
2. Stock Price (200M shares):
   • Conservative (7x FCF): $90.3B / 200M = $451.50/share.
   • Optimistic (10x FCF): $129B / 200M = $645/share.

Conclusion: If gold reaches $4,000/oz and silver reaches $100/oz, GoGold Resources’ potential stock price could be:

• $451.50/share (7x FCF).
• $645/share (10x FCF).

These estimates assume full production capacity, stable costs, and favorable market conditions, making it a speculative but high-leverage play.

ANALYSIS 2

GoGold Resources (GoGold Silver & Gold): Overview and Analysis

Key Projects and Production

1. Parral Tailing Project (Mexico):
   • Production: 1.5M oz AgEq annually.
   • All-in Costs: ~$20/oz (FCF).
   • Mine Life: ~10 years remaining.
   • Resource: 24M oz AgEq.
   • Exploration Potential: None (tailings).
2. Esmeralda Tailing Project:
   • Resource: 13M oz AgEq.
   • Future Production: ~1M oz/year (costs similar to Parral).
   • Status: No production timeline yet.
3. Los Ricos Project (Mexico):
   • Total Resource: ~270M oz AgEq at 120 gpt (and growing).
   • Drill Story: 8 known veins with potential for significant resource expansion.
   • Divided into Two Deposits:
     • Los Ricos South (LRS):
       • Capex: $150M.
       • Production: 6M–8M oz/year.
       • Costs: $16–$18/oz.
       • Start: 2025 (pending permits).
       • Mine Life: ~11 years (with potential exploration upside).
     • Los Ricos North (LRN):
       • Capex: $220M.
       • Production: 8M–9M oz/year.
       • Costs: $16–$18/oz.
       • Start: 2027.
       • Mine Life: ~13 years (with potential exploration upside).
4. Combined Production Forecast (Including Los Ricos and Tailings):
   • 2025: 2M oz AgEq.
   • 2026: 6M oz AgEq.
   • 2027: 8M oz AgEq.
   • 2028: 15M+ oz AgEq (including ~1.5M oz from tailings).

Financial Overview

1. Funding:
   • Fully funded for LRS with $100M in cash.
   • Payback period for LRS is ~1 year, ensuring minimal debt for LRN.
2. Free Cash Flow Potential (2028 at $50 Silver):
   • Estimated production: ~17M oz AgEq.
   • Costs: ~$18/oz.
   • Revenue: 17M × $50 = $850M.
   • Costs: 17M × $18 = $306M.
   • FCF: $850M - $306M = $544M annually.

Valuation Potential

At $50 silver with a 10x FCF multiple:

• Market Cap: $544M × 10 = $5.44B.

At $100 silver:

• Revenue: 17M × $100 = $1.7B.
• Costs: 17M × $18 = $306M.
• FCF: $1.7B - $306M = $1.394B annually.
• Market Cap: $1.394B × 10 = $13.94B.

Estimated Stock Price (Assuming 300M shares outstanding):

• At $50 Silver: $5.44B ÷ 300M = $18.13/share.
• At $100 Silver: $13.94B ÷ 300M = $46.47/share.

Key Strengths

1. Low capex for Los Ricos projects.
2. High-growth production profile (15M+ oz AgEq by 2028).
3. Strong exploration upside in Los Ricos South and North.
4. Fully funded for LRS construction.

Key Risks

1. Permitting delays for Los Ricos South.
2. Reliance on base metals for low costs.
3. Long-term production sustainability depends on exploration success.
4. Tailings projects lack exploration upside.

Conclusion

GoGold Resources has significant upside potential with its Los Ricos projects driving future production growth. At $100 silver, the estimated stock price could reach around $46.47/share, making it a compelling high-risk, high-reward opportunity for silver investors.

EXPERTS' VIEW COMPARISON

The primary difference between the two analyses lies in the methodology, assumptions, and valuation models. Here's a breakdown of why the outcomes differ:

Key Areas of Difference

1. Production Projections:
   • Analysis 1 assumes full production of 15M oz AgEq in 2028.
     • 80% silver (12M oz) and 20% gold (3M oz).
     • Full production capacity is being considered as if no production issues, delays, or additional dilution will occur.
   • Analysis 2 includes a phased production forecast:
     • Growth in production to 15M oz AgEq by 2028, but adds tailing projects (~2M oz AgEq) to account for ongoing operations and potential exploration challenges.
   Why It Matters: Assuming 15M oz AgEq from Los Ricos only simplifies the calculation but ignores contributions from smaller assets like Parral and Esmeralda. Analysis 2 accounted for these assets.

1. Revenue Assumptions:
   • Analysis 1 uses $4,000/oz gold and $100/oz silver.
     • It assumes 80/20 silver-gold split and multiplies directly.
   • Analysis 2 applies a blended price for silver equivalent (AgEq).
     • I treated the entire production as AgEq and included base metal offsets (zinc, lead, copper) from Los Ricos North and South, which lower AISC. This gives a more granular cost picture.
   Why It Matters: Treating all production as AgEq simplifies calculations, but it doesn’t reflect potential differences in recoveries, grades, or operational complexities between metals.

1. Cost Assumptions:
   • Analysis 1 assumes $20/oz AISC uniformly.
     • This works for simplicity but might underestimate cost inflation or changes in operating conditions (e.g., higher costs for underground mining at Los Ricos South).
   • Analysis 2 provides a range for AISC ($16–$20/oz).
     • I factored in base metal offsets (zinc, copper) for Los Ricos projects, which could reduce costs below $20/oz depending on production efficiencies.
   Why It Matters: Uniform AISC can lead to overestimation of Free Cash Flow (FCF) if actual costs increase due to inflation or operational challenges.

1. Valuation Multiples:
   • Analysis 1 uses aggressive multiples (7x–10x FCF).
     • These multiples assume GoGold Resources will maintain stable FCF at peak production, with no significant challenges.
   • Analysis 2 uses a more conservative 10x FCF multiple for high silver leverage.
     • While optimistic, it reflects a more typical valuation for mining companies with potential risks factored in.
   Why It Matters: Higher multiples result in significantly inflated stock price estimates, but they are optimistic. Realistically, miners rarely trade at 10x–15x multiples except under speculative bubbles.

1. Shares Outstanding:
   • Analysis 1 assumes 200M shares outstanding.
     • This may underestimate share dilution needed to fund additional exploration or development.
   • Analysis 2 uses 300M shares outstanding.
     • This accounts for dilution from funding future expansions like Esmeralda and Los Ricos North.
   Why It Matters: Using lower shares outstanding inflates the stock price per share, while ignoring dilution understates future shareholder dilution risks.

Why the Results Differ

1. Analysis 1:
   • Assumes full production (15M oz AgEq) by 2028.
   • Assumes simplified costs ($20/oz AISC).
   • Aggressive revenue assumptions: $4,000 gold and $100 silver with a direct contribution model.
   • High FCF multiples (7x–10x) result in large market cap estimates.
   • Result: $451.50–$645/share (extremely optimistic).
2. Analysis 2:
   • Incorporates phased production (~15M oz AgEq in 2028 plus 2M oz tailings).
   • Includes blended metal pricing and base metal offsets for realistic cost assumptions.
   • Assumes realistic FCF multiples (10x) and higher share dilution.
   • Result: $46.47/share at $100 silver, reflecting a balance of potential upside and realistic market dynamics.

Which Is More Realistic?

• Analysis 1:
  • It represents a highly bullish scenario with no room for operational delays, cost inflation, or share dilution.
  • Multiples and share count are optimistic but may not hold up in real market conditions.
• Analysis 2:
  • It incorporates risks (dilution, costs, base metals) while still capturing the upside of high silver prices.
  • It offers a more conservative yet achievable target.