Conservative 630% upside for Horizon MineralsHello and thanks for viewing.
I tend to write a lot. My valuation is based on a few assumptions;
- There are no new material ore discoveries as extraction progresses,
- The gold price doesn't rise over time,
- The miner will have the 'average' profitability of gold miners of 11% (I use 10%),
- The miner will be fairly but not excessively valued vs its earnings. I used a PE ratio of 20, which is pretty normal.
Reserves are over 1.8 million ounces x AUD4539/oz = AUD8.17B / 25 year mine life = AUD326m a year. At 10% EBIT this is AUD 32.6m in earnings per year. If valued at a PE ratio of 20, this would give the mine a value of 653.6m. The current Market Cap is AUD103m (up 53% in the past month) so a 6.3x of the current price is $0.456.
I have already bought in and am up 46% in a week :) so WHEN we hit $0.45 that is a 9.5x gain for me. I might sell 50% then, not sure, depends on how much positive news accumulates up until that point.
Just sharing my method. I feel it is easy to apply, is sufficiently conservative, not too naive. Oh, I don't trade short-term. I have found that short-term trading only makes money for brokers and dramatically increases risk. I find a share that I am comfortable offers a large margin of safety, if the price goes down after I buy in, I am happy, especially if I can add to my position.
HRZ trade ideas
HRZ strong buying over last few days and new breakout to 12cHorizon has been massively undervalued over the last year, but it seems that large sellers have left the building now, and the price is being allowed to rise to its fundamental level(s) considering it is actually producing and will produce more gold, silver as time goes on. New high to 12.5c and good volume last few days.
HRZ LongTechnically: Price has just traded sideways out of a downtrend while a triple support bottom has formed at the same time. Look for good entries and keep a watch out for the bitcoin breakdown. Just finished a nice toll treatment program netting 3.6M after costs. HRZ poised for the next gold breakout they have a lot of good ground, HRZ moving towards owned and operated process plant. Should be looking at and easy 100% return once Bitcoin starts it's sell off and investors returning to gold when safe haven buying returns.