Majestic Gold is an emerging mid-tier producer. They should reach full production of 105,000 oz (they get 75%) in about 18 months. Their Song Jiagou flagship project in China is a very low cost mine ($400 per oz) and will produce high cash flow of more than $75 million for 22 years (if gold prices remain high). The NPV of the project is $975 million at $1500 gold. The capex is very low at $64 million. With a fully diluted market cap of only $151 million, they are selling for about 2x cash flow once full production is reached. Thus, it should be an easy 2 bagger if gold prices rise.
They do not have a pipeline and they have extreme share dilution (1.1 billion shares), which could keep investors away. Also, the location of China is not considered a safe investment location for many investors. However, if they have some exploration success and can expand the resource beyond 3 million oz (75% = 2.25) and expand production to 150,000 oz (75% = 110,000 oz), that could easily boost this stock to 5 bagger territory. It's not an exciting stock, but it does have potential from that very long cash flow stream.
Small producer in China. 3 million oz resource. PEA to ramp up production to 105,000 oz (they get 75%).
Resources and Cash Flow reduced because they only own 75%.
Gold Price (last analysis) ($)
1480.00
Silver Price (last analysis) ($)
24.00
Stock Price (last analysis) ($)
0.14
1 Yr Stock Price High ($)
0.21
Stock Price Change From 1 Yr High (%)
-33%
Stock Price USA 5-Year High ($) (including date)
.52 Cents - 4/30/2007
Stock Price USA 5-Year Low ($) (including date)
.02 Cents - 9/29/2008
People (wag)
Experienced Team. Extreme dilution.
Mine Locations
China
Local Issues (wag)
Potential political issues
Ownership
75.00%
Country of Incorporation
Canada
Gold Properties
Song Jiagou is their only project. However, it is a flagship project with 3 million oz (1.2 gpt0 and exploration potential.
It is very long life mine of 22 years. Production just began, with full production of 105,000 oz expected in about 18 months.
They have a PEA with a capex of $64 million to expand production. The IRR is 110% at $1500 gold with a $995 million NPV. So they will have no problems getting financing.
They have a pretty good balance sheet with $18 million in cash and $14 million debt, plus the are profitable at a current 20,000 oz production rate.
Cash costs are very low (around $400 per oz).
Silver Properties
Hedging
Shareholder Friendly (wag)
Extremely diluted
Flagship Property
Song Jiagou
Ore Grade (wag)
1.2 gpt
Drill Results
Rating History
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