Ann: Argo invests in Pantheon Resources Plc , page-5

Hi 1Bacchus,

It really depends on the success of the drilling program in Austin Chalk to begin with, but with a few quick assumptions, we can get a reasonable idea, all things going according to plan:
** it is assumed that each well drilled will produce about USD6mm (PV discounted at 10%) after costs (opex, taxes, royalties) to PANR.L
** drilling in the nearby acreage has been 98% successful to date, with the "miss" being down to a mechanical fault. For the most optimistic case on the Austin Chalk formation, let's assume that 100% drills will be successful here.
** 50 holes are being targeted as part of the drill program.
** PANR.L has 102.1mm shares outstanding, of which AXT.AX owns 7mm. AXT has 82.8mm shares outstanding.
** Assume FX GBP:USD = 1.60
** Assume FX GBP:AUD = 1.80
** For simplicity, let's assume that the PV of all 50 Austin Chalk holes will be reflected 100% in the share price of PANR.L

Then, 50 holes x USD6mm = total potential value for Austin Chalk alone = USD300mm = GBP187.5mm which would give a share price of GBP1.84 per PANR.L share.

The value of this for each AXT share would be as follows:
(GBP1.84 x 7,000,000 x 1.80) / 82.8mm = AUD0.28

This does not include any potential find in the other block lying at greater depths, the PV of which was shown to be worth about USD21mm to PANR.L, or about 3.5x the value per hole in the Austin Chalk formation.

Even if you were conservative and discounted the 98% success rate which has occurred to date, 50%-75% recovery of potential targets would still equate to about AUD0.15 per share for AXT.

It is a valuable option, no doubt about it.

G