|
Investor Info
| |
|
Frequently Asked Questions
| | |
| Q | What is the rationale behind Pacific Rim's corporate goal of becoming a low-cost intermediate-level gold producer? |
| A | Pacific Rim Mining Corp. is committed to profitability and growth through the discovery, development and operation of high-grade, low-cost gold mines. The Company's corporate goal is to become a low-cost, intermediate-level gold producer. Our corporate goal reflects our desire to achieve, on behalf of our shareholders, a premium valuation on the Company's stock.
At this point in time, gold equities are valued primarily on their profitability. The lower the operating cost of each ounce of gold in reserve, the higher the market multiple. In other words, cost is king. Valuations are furthermore a function of production levels, with intermediate producers, those that produce 150,000 to 500,000 ounces of relatively low-cost gold yearly, commanding the highest multiples in the market. A common valuation rule of thumb for gold companies is cash flow per share. Generally speaking junior producers (those that produce roughly 100,000 ounces per year or less) typically receive a market multiples about half those of the intermediate producers (6-12 times cash flow per share for the juniors versus 25-35 times cash flow per share for the intermediates that have achieved low-cost production). Regardless of size, market multiples for higher-cost operators are lower. Companies with strong growth profiles are often at the higher end of the range of cash flow per share. Our objective is to include Pacific Rim in the elite group of low-cost, intermediate-level gold companies. |
| |
| | You can view the Next Frequently Asked Questions item: When will the El Dorado project go into production?
You can return to the main Frequently Asked Questions page, or press the Back button on your browser.
|
|
|
