current share price, ev and dalton's npv, page-7

Agree Wangchung there is a high level of tonnage that I didnt account for however I based that quick analysis on known resources only.

This situation is really no different to Gunns Limited back in the early 1990s who had all of these forests in Tassie which werent shown on their balance sheet. The company wasnt followed all that closely and so these forests werent showing in the share price or asset backing per share.

So if we didnt want to use known resources and instead wanted to look at exploration targets instead, the story becomes even more appealing (albeit each project will have its pros and cons).

The following is just the exploration targets outlined by GIR themselves and in brackets I have inserted my assumed amount to identify a total figure.

Western Creek 50Mt to 100Mt (75Mt assumed)

Beebyn 40Mt to 70Mt (55Mt assumed)

McPhee Creek 100Mt to 140Mt (120Mt assumed)

Yerecoin 200Mt to 250Mt (225Mt assumed)

Earaheedy 750Mt to 1,250Mt (1,000Mt assumed)

Other projects with no exploration targets yet assumed current JORC resource

Daltons (GIRs 75% share) 30Mt

Anthiby Well 38Mt

Total = 1,543Mt total resource

I must note however that some of these exploration targets have already been deemed to be conservative particularly McPhee Creek.

As Giralia reported themselves in their UK presentation, recent takeover valuations for JORC resource ranged between $7.56 per tonne right down to $1.29 per tonne.

Its interesting that in their UK presentation they devoted a whole slide to comparable valuations for nearby projects within Atlas Iron and recent takeover valuations. I get the feeling that they literally have to teach the rest of the market what their assets are worth (rather than the market discovering it for themselves).

Carmichaels Research showed an average amongst Explorers to be $1.28 per tonne when calculating explorers Enterprise Value.

Using the most conservative figure of $1.28 per tonne to calculate Enterprise Value, upon full resource drillout, why couldnt this company be worth $1.9 billion (or $10.60 per share) for purely its JORC resources. i.e. 1,543Mt x $1.28 per tonne.

If (or when) GIR moves into production and into cashflow generation then its valuation on each tonne of its JORC resource will increase. Again as per Carmichael report the average $/per tonne for a producer is $7.90 per tonne (ranging between $4 to $14 per tonne)

The key unknowns are as follows:

- Rail access on each project
- Feasibility of road haulage (if needed)
- Shipping access from all ports
- Actual JORC resource results
- Price of iron ore.

Patience is always needed with any asset play however for it to be correctly valued however I suspect moving to production will spur a little bit of interest.

I think Giralia is simply continuing its boring (but good story) of building up their land bank and seeing what comes of each, whether it be production, spin-off or nothing.