how much is springhill worth, page-2

Hi SnowKat,

I’m quite new to this so not sure if this is correct or not, if there are more experienced investors reading I’d appreciate any comments?

I found this site useful:
http://www.stockhouse.com/columnists/2010/feb/1/valuing-a-junior-miner-s-gold-in-the-ground

Things to consider when valuing a gold mine:
1.Proven and Probable Reserves
2.Cash Cost per Ounce to produce
3.1 and 2 give will indicate a rough - Mine Asset Value
4.Costs incurred to get to production ie. Loan or debt
5.Gold price

From what I’ve read gold in the ground is valued using a standard of 3 groups:
a) Inferred
b) Measured & Indicated (M&I)
c) Proven & Probable (P&P)

Latest prices I can find are:
a) US$20 per ounce Inferred
b) US$30 per ounce for M&I
c) US$160 per ounce for P&P

So, Spring Hill has an indicated resource of 450,000 oz gold.
Current Measured & Indicated gold valuation price = US$30/oz
450,000 x 30 = 13,500,000 US$, approx GB£9 million, approx A$13 million.

Thor own 51% of Spring Hill = A$6.6 million or GB£4.5 million

If Thor could 'prove' resource then that value might increase 5 fold to A$30 million plus. Maybe thats why Mick wants to develop SH further?

Looks a good asset to me when you consider other factors, location, proximity to utilities, roads, largely surface resource....

thats my tuppence worth...
MT