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To calculate the potential stock price of Fresnillo if silver reaches $100 per oz, we can follow these steps:
### Assumptions and Inputs
1. Annual Silver Production: 55 million oz (projected for 2025).
2. Assumed Cash Costs: Let's assume cash costs drop to around $15 per oz (considering offsets from gold production).
3. Market Cap Calculation:
\[
\text{FCF} = \text{Production} \times (\text{Price} - \text{Cash Costs})
\]
\[
\text{FCF} = 55,000,000 \times (100 - 15) = 55,000,000 \times 85 = 4,675,000,000 \text{ USD}
\]
### Market Cap and Stock Price
1. Assumed Price to FCF Ratio: If we value the company at 10 times its free cash flow:
\[
\text{Market Cap} = 4,675,000,000 \times 10 = 46,750,000,000 \text{ USD}
\]
2. Shares Outstanding: Assuming approximately 1 billion shares:
\[
\text{Stock Price} = \frac{\text{Market Cap}}{\text{Shares Outstanding}} = \frac{46,750,000,000}{1,000,000,000} = 46.75 \text{ USD/share}
\]
### Conclusion
If silver reaches $100 per oz, and assuming the company can produce 55 million oz with reduced cash costs, the stock price of Fresnillo could potentially rise to approximately $46.75 per share based on the calculated free cash flow and market cap.
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