It has been awhile so perhaps it is a good time to do the math; a couple of points first

Mark Lackey of Hampton Securities called CMM his "top pick" .. his statement was he could find no other company with 3 cents a share earnings with such a low valuation ... What then will the valuation be when 4th quarter earnings are releases; Earnings then will be 5-6 cents.

We can look at a few valuation methods:

First - its hard to use Price to Book value on CMM because the book is hard to calculate at present. We could make a few assumtions

1) assume Lamaque if sold could pay off all liabilies.
2) assume san juan could be sold for 4 times Earnings of 12 million/year = 48 M

When the 55 M hits the bank call it a book value of 100 M and go 2 times book = 200 million market cap : While useful .. I dont think this valuation method, in the near term, will reflect the share price potential. After dilution call it a 120 M market cap currently giving an estimated shart price of roughly 70 cents

Value of Gold in the ground - $38 vs 300 - 400/ oz... use 2/3 of the value for share dilution and the company has to increase at least 5 x current value to approach the bottom of this level. .. Share price around 2.00 ( Interestingly this would give CMM a new all time high ( > 1.80)

UsingEarnings - At gold prices above 1000 san juan will earn roughly 3 million a quarter = 12 M per year

Using a price/earnings ratio just 10 we get 120 million market cap. If you take the current market cap of 80 million and factor in the dilution from financing (80 million is 2/3s of 120 million) The market appears to have priced in the dilution ! of just the san juan earnings.

Based on earnings from San Juan alone .. the current market cap is justified "after dilution - the market has already priced this in"

Once the money is " in the bank" all near term risk of CMM going into bankruptcy is gone .. The market will then begin to factor in future earnings at higher P/E multiples.

If Lamaque can produce 15,000 oz per quarter ( 60 K/ Year) and San Juan 5,000 oz ( 20 K/ Year ) gives a annual estimate of 80,000 oz production per year. Using a cash cost of 500, at a gold price of 1000 or above we get 500 profit per ounce.

80,0000 x 500 = 40 million profit per year; Using a P/E of 15 gives a market cap of 600 million or 5 x the current fully diluted market cap of 120 million. Share price of 2.00


Based on the above fundimental analysis we could expect that once the money goes into the bank CMM will immediately move to a share price of 70-80 cents based on 2 x book .. then .. as CMM moves towards production ( workers start working, ore starts being stockpiled and assayed) SP will move towards the 2.00 suggested by future earnings estimates.

Along the way the SP may be bolstered by continued positive earnings from San Juan and good drill results from Lamaque .. and the start of drilling exploration at San Juan.

Cheers all and Happy New Year !