market cap, page-9

FiendishRedbeard,

I have held AND since 2001 and having recently pondered if now as the time to bale, went through the exercise of trying to put a value on the company. Using the public domain data from PFS, adding estimates (guesses) for subsequent discoveries and applying current metal prices broadly shows the following:

Project NPV of around $700M based on PFS reserves and current prices.

This rises to $1,150M by adding ~800kozs for previous Eureka West extensions and potential additions reserves at Bajo Negro, San Marcus et al which I believe is a reasonable expectation based on drilling results and also the rate of discovery graph shown in recent presentations.

The latter is based on around 3000tpd for ten years after initial capital of $180M and it does not change much for an eight year mine life at 4000tpd and $312M capital.

These NPV calculations use the PFS inputs (with mining cost increased slightly), 10% rate and provide a good insight into why large investors are still willing to shell out up to $2.70 for AND.

The potential upside for higher metal prices ($150M of each 100/equiv.oz) is good but the potential to further increase in resources is the big prize with NPV going to $1,400M and $1,900M respectively for the throughputs above if additional reserves of five years can be identified once production starts.

This is of course all pure speculation, but based on what AND has already managed to discover (seemingly everywhere they choose to look), my personal decision is continue the ride for a while yet.

The analogy with BSG is also familiar to me, having held that since 2000. It is important to note however that the average grade of Palmarejo of 5.2 g/t Auequiv. is around two third of what AND has and Au and Ag prices were also only two third of what they now. I could also add that the quality of management for AND seems much higher than for BSG and doubt any former BSG holders would agrue that.

Nick