To estimate the potential stock price of Heliostar Metals based on a predicted gold price of $4,000 per ounce, we can follow a similar process as before.

Step 1: Estimate Future Revenue from Ana Paula

Projected Production:
- Assume Ana Paula can produce 100,000 oz per year after construction.
Predicted Gold Price: $4,000 per ounce.

Future Revenue Calculation

Revenue Estimate

Future Revenue=Total Production×Predicted Gold Price\text{Future Revenue} = \text{Total Production} \times \text{Predicted Gold Price}Future Revenue=Total Production×Predicted Gold PriceFuture Revenue=100,000 oz×4,000 USD/oz=400,000,000 USD\text{Future Revenue} = 100,000 \, \text{oz} \times 4,000 \, \text{USD/oz} = 400,000,000 \, \text{USD}Future Revenue=100,000oz×4,000USD/oz=400,000,000USD

Step 2: Estimate Future Cash Flow

Assuming a cash flow margin of 30%:

Cash Flow Estimate

Future Cash Flow=Future Revenue×Cash Flow Margin\text{Future Cash Flow} = \text{Future Revenue} \times \text{Cash Flow Margin}Future Cash Flow=Future Revenue×Cash Flow MarginFuture Cash Flow=400,000,000×0.30=120,000,000 USD\text{Future Cash Flow} = 400,000,000 \times 0.30 = 120,000,000 \, \text{USD}Future Cash Flow=400,000,000×0.30=120,000,000USD

Step 3: Calculate Market Cap and Stock Price

Assuming the company has around 100 million shares outstanding:

Market Capitalization

Using a conservative valuation multiple of 5x cash flow:

Market Cap=Future Cash Flow×5\text{Market Cap} = \text{Future Cash Flow} \times 5Market Cap=Future Cash Flow×5Market Cap=120,000,000×5=600,000,000 USD\text{Market Cap} = 120,000,000 \times 5 = 600,000,000 \, \text{USD}Market Cap=120,000,000×5=600,000,000USD

Stock Price Calculation

Stock Price=Market CapShares Outstanding\text{Stock Price} = \frac{\text{Market Cap}}{\text{Shares Outstanding}}Stock Price=Shares OutstandingMarket CapStock Price=600,000,000100,000,000=6.00 USD\text{Stock Price} = \frac{600,000,000}{100,000,000} = 6.00 \, \text{USD}Stock Price=100,000,000600,000,000=6.00USD

Conclusion

Based on a predicted gold price of $4,000 per ounce and the assumed production from the Ana Paula project, the potential stock price of Heliostar Metals could be approximately $6.00 per share, high end $12, assuming they can achieve their production targets and maintain a solid cash flow margin.

This price reflects significant upside potential if they can successfully develop Ana Paula and if other projects like Unga or San Antonio also progress favorably.

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Disclaimer

The user RockeTeller has a position in TSXV:HSTR. 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.

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