the waiting game, page-14

We could be looking at 20 years LOM if there is a viable underground deposit below OC - still untested. There is at Smarts and Hicks except that grades are too low to make those deposits viable except for the 280k ounces of Smarts underground.

I had my doubts regarding OC too because Troy's balance sheet is still strained. Good to see that OC seems to have the possibility of a starter pit providing quick cash, a larger more consistent area at the NW bringing the opportunity to get this into production within a reasonable time frame (i.e. 2020) and higher grade remainders of OC where exploration could be tricky, so likely more profitable but longer lead time for development needed.

LOM 7 years is the best bet we can make based on the published information so far. It might be 5 years or 10 years, does not matter. What matters is that there is a huge discrepancy between the market applying a 0.75 multiple on a 7 year LOM project. A reasonable valuation would be making assumptions about LOM and then taking into consideration all the work still needed, infill drilling, every aspect of uncertainty etc. and then applying a discount that should vanish step by step as the deposit makes progress.