To calculate Avino Silver & Gold's potential stock price when silver reaches $100 per oz in 2028, we can follow a structured approach based on the information provided.
Step 1: Revenue Estimation for 2028
1. Production Estimates:
- Silver Equivalent Production: 7 million oz (AGEQ)
2. Projected Revenue:
Revenue=Production×Silver Price=7,000,000 oz×100 USD/oz=700,000,000 USD\text{Revenue} = \text{Production} \times \text{Silver Price} = 7,000,000 \, \text{oz} \times 100 \, \text{USD/oz} = 700,000,000 \, \text{USD}Revenue=Production×Silver Price=7,000,000oz×100USD/oz=700,000,000USD
Step 2: Free Cash Flow Estimation
1. Estimated Costs:
- Breakeven Costs (AISC): $30 per oz
2. Free Cash Flow Calculation:
FCF=(Revenue−Costs)=(700,000,000−(7,000,000 oz×30))=700,000,000−210,000,000=490,000,000 USD\text{FCF} = (\text{Revenue} - \text{Costs}) = (700,000,000 - (7,000,000 \, \text{oz} \times 30)) = 700,000,000 - 210,000,000 = 490,000,000 \, \text{USD}FCF=(Revenue−Costs)=(700,000,000−(7,000,000oz×30))=700,000,000−210,000,000=490,000,000USD
Step 3: Valuation Based on FCF
Using a 10x multiple on free cash flow for valuation:
Market Cap=FCF×10=490,000,000×10=4,900,000,000 USD\text{Market Cap} = \text{FCF} \times 10 = 490,000,000 \times 10 = 4,900,000,000 \, \text{USD}Market Cap=FCF×10=490,000,000×10=4,900,000,000USD
Step 4: Estimate Stock Price
Assuming Avino Silver & Gold has approximately 57 million shares outstanding (based on the current FD market cap of $102 million at a stock price of about $1.79):
- Stock Price Calculation:
Stock Price=Market CapShares Outstanding=4,900,000,00057,000,000≈86.0 USD\text{Stock Price} = \frac{\text{Market Cap}}{\text{Shares Outstanding}} = \frac{4,900,000,000}{57,000,000} \approx 86.0 \, \text{USD}Stock Price=Shares OutstandingMarket Cap=57,000,0004,900,000,000≈86.0USD
Conclusion
If silver reaches $100 per oz by 2028 and Avino successfully produces 7 million oz of silver equivalent, the estimated stock price could be around $86.00 per share. This calculation illustrates the significant upside potential for Avino, especially considering its current market cap of only $101 million.
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