I take a more modest view of the future share price of SGR, based on the following criteria and with no further share dilution: (all figures in $US)

Annual production = 200,000 ounces for 100 years

Average selling price per ounce = $ 1200

All-in cost of production per ounce, including retained earnings = $ 600

Shareholders equity = $ 600 per ounce x 200,000 = $120,000,000.00

Shareholders equity per share = $120,000,000.00 / 300 million = 0.40 cents

Price to earnings ratio @ 10x = $4.00

It follows, then, when we finally, mercifully, get to an annual produciton of 200,000 ounces we will be fairly valued at $4.00 per share. So why buy and hold @ $4.00 ?

Because for reasons known only to the GODS of gold, almost all gold miners trade at higher PE multiples than 10x. As of July 16, 2010:

Agnico = 173x

Kinross = 31.5x

IAM Gold = 51.3x

Yamana = 34.1x

Eldorado = 49.7x

Goldcorp = currently losing money - cannot measure

Barrick = currently losing money - cannot measure

So if we traded at Eldorado's PE, our share price would be 49.7 x 0.40 = $19.88

Fred25