We have reduced our forecasts for FY21 to reflect the recent weakness in the gold price. However, we expect this to be only a temporary phenomenon and for gold to remain in a fundamental bull market for as long as real interest rates remain below 4%.
On the basis that management executes the Kara-Beldyr project according to the operational and financial parameters expected (NB this is a risk already substantially mitigated by management’s success in developing the Tardan CIL project), we estimate that Auriant is capable of generating average annual cash flows of $63.8m, average earnings of $55.2m and average EPS of $0.418 from FY25–34, thus allowing it to pay (average) maximum potential dividends of 47.0c/share in FY26–34.
Discounted at our customary 10% discount rate, the value of such a stream of dividends to shareholders has remained steady at $1.76 per share, rising to $2.80/share on the cusp of th e company’s maiden dividend in FY26.
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