A SP Estimate (ROM)

To provide me with buy or sell guidance I use heuristic rules to determine a ROM (Rough order of Magnitude) SP.
Based on what we know, I extrapolate.

Gold 650,000oz Production 80000/yr life of mine 8 years Profit $40m based on $500/oz/pa
No of shares 450m PE 7 Value 40/450 x 7 = 63c Pre scoping stage of life cycle 63/4 = 16c Current SP 15c

Gold 1,000,000 oz Production 100,000/pa life of mine 10 years Profit $60m based on $600/oz/pa
No of shares 650m PE 8 Value 60/650 x8 = 74c Pre scoping stage of life cycle 74/4 = 18.5c

Life cycle (LC): Exploration, Scoping. Pre Feasibility, Definitive Feasibility, Mature Production

SP value should increase in line with stage of LC to circa SP of 74c. At the Scoping stage I usually use 33% of mature SP but presently only used 25% i.e. /4 until Scoping details are known (by end Jun 16). The SP estimate would then be 24.5c

As there are many variables i.e. more gold, higher gold price, lower Exchange Rate etc etc the SP is a rough estimate only.

All other estimates welcomed.

Ciao

R1