Conservative 630% upside for Horizon Minerals

Hello 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.