Let's just talk about the valuation based on reserves.
Today we learnt that EVN paid $41.3 million to acquire 11.05 million shares in TBR from the banksters allocated by the takeover panel to deal with the shares that ASIC siezed pursuant to the declaration of unacceptable circumstances.
The 11.05 million shares give EVN a 19.9% stake in TBR and an effective exposure to the EKJV of 7.3% that hosts a Mineral Resource of 10.54Mt grading 6.1g/t for 2.06Moz Au and Ore Reserves of 6.15Mt grading 6.3g/t for 1.24Moz Au1.
So EVN just paid $41.3 million for 7.3% of a 1.24Moz gold reserve situated in an aging underground mine complex (25km from Kalgoorlie) within trucking distance to their 1.7Mtpa treatment plant. That's $456 per reserve ounce.
RSG has 3.5 million ounces of reserves at Syama alone which would be worth $1.596 billion using the same $456/oz metric and that's not to mention that RSG have a total of 5.2 million ounces of reserves between Syama and Ravenswood which I won't calculate using this same metric for fear of showing how embarrassingly undervalued RSG actualy is based on reserves.
As you would also know the NST share price values these same reserves much higher than the EVN purchase value which I cringe to describe as being bought under "arms length" conditions.
You can say RSG is overvalued but I say it is grossly relatively undervalued to peers. Gold miners need reserves to survive and ways of replenishing those resrves cheaply. Buying reserves at an effetive rate of about $456/oz just goes to show what a sheet fest these Aussie gold miners have become. Syama has 4.4 million ounces of resources in addition to its 3.5 million ozs of reserves that can in all likelyhood be cheaply converted once the operation establishes itself UG. Most of this extra 4.4 million ounces of resource sits in one depoist under the existing reserve at Syama. That's a fair wack compared to the 820kozs of resource (above reserves) that currently exist at the EKJV (100%) in 5 seperate deposits. Raleigh has been going 18 years and is only still in production due to some lateral extensions. Drilling below the resource envelop came up mostly empty when it was atempted. Now you tell me where the better long term value exists.
(20min delay)
