Looking at how the price of gold (and the Canadian dollar) have risen these past months, I thought it might be worth the effort to update my NPV cash-flow model for San's valuation.

Assumptions:

Production: 2009 - 47,000 oz, 2010 - 125,000 oz, 2011 - 210,000 oz, 2012+ - 250,000 oz, 35 year mine life (6M+ total oz mined).

US$350/oz production cost. $1.50/oz smelter rate.

$GOLD: US$1,050, $CD/$US: 0.95

280,674,289 shares out, fully diluted

NPV/Share CD$:
$2.84 15% DR
$4.42 10% DR
$6.06 7% DR
$7.67 5% DR

Out of curiosity, I also took a look at what SGR should be worth in 2012 from a net earnings multpile point of view, assuming they reach the planned 250,000 oz/y production by then, and $GOLD stays ~US$1,050/oz.

250,000 oz/y at a cost of US$350/oz should net CD$$183,051,970/year (with a CD$ worth US $0.95). Using traditional earnings multples you get:

10:1 - CD$6.52/share

15:1 - CD$9.78/share

Looks like we could be looking at a double to a triple from here in just over two years, notwithstanding any gold mania that may occur between now and then. Of course, more production delays, etc. would have the opposite effect.