at a gold price of $4,000 per oz

To estimate the potential stock price for Gowest Gold based on their Bradshaw project, we’ll analyze projected production, costs, potential free cash flow, and market valuation.

Step 1: Production Forecast and Revenue Calculation

1. Projected Production:

• Initial Production: 25,000 oz in the first year.
• Target Production: 90,000 oz by Year 4.

2. Projected Revenue:

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

• Revenue Calculation at Full Production:

Revenue=Total Production×Gold Price=90,000 oz×4,000 USD/oz=360,000,000 USD\text{Revenue} = \text{Total Production} \times \text{Gold Price} = 90,000 \, \text{oz} \times 4,000 \, \text{USD/oz} = 360,000,000 \, \text{USD}Revenue=Total Production×Gold Price=90,000oz×4,000USD/oz=360,000,000USD

Step 2: Cost Calculation

1. Assumed Cash Costs:

For the purpose of this estimate, let's assume cash costs around $1,000 per oz (this is a rough estimate; actual costs could vary based on specifics).

• Total Costs:

Total Costs=Total Production×Cash Costs=90,000 oz×1,000 USD/oz=90,000,000 USD\text{Total Costs} = \text{Total Production} \times \text{Cash Costs} = 90,000 \, \text{oz} \times 1,000 \, \text{USD/oz} = 90,000,000 \, \text{USD}Total Costs=Total Production×Cash Costs=90,000oz×1,000USD/oz=90,000,000USD

Step 3: Free Cash Flow Estimation

1. Free Cash Flow Calculation:

FCF=Revenue−Total Costs=360,000,000−90,000,000=270,000,000 USD\text{FCF} = \text{Revenue} - \text{Total Costs} = 360,000,000 - 90,000,000 = 270,000,000 \, \text{USD}FCF=Revenue−Total Costs=360,000,000−90,000,000=270,000,000USD

Step 4: Valuation Based on FCF

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

Market Cap=FCF×10=270,000,000×10=2,700,000,000 USD\text{Market Cap} = \text{FCF} \times 10 = 270,000,000 \times 10 = 2,700,000,000 \, \text{USD}Market Cap=FCF×10=270,000,000×10=2,700,000,000USD

Step 5: Estimate Stock Price

Assuming Gowest Gold has approximately 500 million shares outstanding (please adjust based on actual share count):

1. Stock Price Calculation:

Stock Price=Market CapShares Outstanding=2,700,000,000500,000,000≈5.40 USD\text{Stock Price} = \frac{\text{Market Cap}}{\text{Shares Outstanding}} = \frac{2,700,000,000}{500,000,000} \approx 5.40 \, \text{USD}Stock Price=Shares OutstandingMarket Cap​=500,000,0002,700,000,000​≈5.40USD

Conclusion

If Gowest Gold successfully ramps up to an annual production of 90,000 oz at a gold price of $4,000 per oz, the estimated stock price could be around $5.40 per share. This reflects significant upside potential, particularly if they can achieve their expansion goals and if exploration leads to increased resources. The company’s current low valuation suggests a possible rebound if they can stabilize operations and improve investor confidence.