Ann: Notification-Southern Cross Equities Report , page-5

re: Ann: Notification-Southern Cross Equities... yep cheers fellas...

to me KRM is still looking pricey...

The research reports are inconsistent between each other,

The SCE report values the exploration assets at $79mil and $25mil for SARINC and $240mil for WayLinggo.

The RBM report values the exploration assets at US$150mil
and SARINC at US$50mil and US$145mil for WayLinggo

Both use undiluted number of shares for their valuations. The dilution is ~17% and on average the options convert for 22.4c per share. Which would reduce a $1.50 target price by 12% or to $1.31/share.

SCE value the shares at $1.19 but then slap a buy rating and target of $1.55 per share. Then disclose they're holding onto 5million+ shares.

The RBM report states: "Total measured, indicated and inferred resources are 670,000 tons at average grades of 8.4 g/t gold and 129 g/t silver. The total contained inventory is 181,000 ounces of gold and 2.8million ounces of silver."

which is in direct contradiction to both the SCE report which is a cut and past job from the Annual Report... which has the total resource at 636kt at 8.09g/t, which equates to 165,442 oz of Au (109,193oz is counted in measured). And to think RBM was paid under $25k to peddle misinformation... lol under $25k, what dimwits say under x amount... oh yea salesmen.

Both reports to me look sloppy and inflated with hype... SCE had a price target of 0.40c and spec buy for AXM mid last year with the title of "commercial production achieved" ...

I'd be weary, paid research reports, news stories, the hype machine in fashion... operation just starting up, not much cash in the kitty... to me it still looks like a pump to get the share price at higher levels.

Just my rough calcs:
Assume...average gold AUD$1400/oz
average total cost $350/oz
Total Resource (Measured resource at 100% Indicated at 80% and inferred at 60%) = 149,343oz
Recovery factor 90% = 134,409oz
Overcall by 20% to resource = 161,291oz
Attributable to KRM at 85% = 137,097oz

WayLinggo = $144m
+ Exploration assets = $79m
+ SARINC = $25m
+ cash = $2.8m(2.6 on Sept30 + .2 options)
Total = $250.8m (minus tax and royalties)
+ cash from options = $9.5m
Fd shares on issue = 291,050,030

Value per share = $0.894 (minus tax and royalties)