Updated Valuation and SWOT - RSG, page-59

Brian I'd stick to EV/Production.

Look at my example. Maybe if you used an industry average AISC your measure could take on some real world meaning (would need to think about it) but just picking $1,000 per ounce doesn't produce meaningful real world valuations. At best it is a relative measure as the output yields similar but not exact ranges when the scale factor is changed.

Look at my example again below

"Take for example three random theoretical companies all with the same EV of $1 billion, all producing 300koz/annum and ASICs of $900/oz, $1,000/oz and $1,100/oz respectively. Using Brian's formula based on his randomly chosen $1,000/oz scale factor, the scaling function F(X) yields the following 0.9, 1.0 and 1.1 and his scaled (AISC adjusted) EV/Production metric yields $3,600/oz, $4,000/oz amd $4,400/oz respectively. If he chose $900/oz as a scale factor instead of $1,000/oz for the same three companies he would get completely different results for the same three companies is, $4,000/oz, $4,444/oz and $4,888/oz instead of the results calculated above."

Changing the scale factor by $100/oz produces totally different results and even the valuation range between the three companies doesn't stay exactly the same nor the differences in outputs when the scale factor is varied. The range and differences in the values you calculate are linearly dependent on the change in your scale factor another indication that your formula doesn't have a power law (square) involved. What does stay the same are the relative valuations your formula produces. I supppse it works on this level. Esh

https://en.m.wikipedia.org/wiki/Power_law