spin off value assumptions..., page-36

Are you serious wanty? did you swallow that?

I wondered what sort of spin we might see on this announcement. It had to be great because t4p has so much invested in this one.

“Don’t need to think too hard here…

The key is tonnage and grade….likely profitability…and obvious upside given their significant ground position, which should result in a fast-track to production AND significant development upside!

Relatively small tonnage existing at 300,000t @ 0.3% (6.2lb/t)...but this is equivalent to say 2,000,000t @ 0.045% …which is not far off what a few Aussie hopefuls are looking at.”

This is 900 tonnes of Uranium. Of which GDN will hold 30% so 270 tonnes or 650,000 pounds. Perhaps we do need to think a bit harder here.

“The new joint enterprise has distinct advantages:
• In excess of 1.9 million pounds of U3O8 with an ore grade of 0.3% (6.2 lbs per ton)
contained in 300,000 tons of ore in high grade sandstone-hosted roll-front deposits,
plus substantial exploration potential on the Thompson Project.”

“It is anticipated that Golden State and White Canyon will each hold approximately 30% of the
new entity, with the remainder to be held by the public as a result of a planned capital
raising. It is the intention of Golden State’s directors that there will be a priority entitlement
for Golden State shareholders to participate in this raising.”
I assume this means GDN has 30% and White Canyon has 30% leaving 40% for the new entity.

If you were to use a long term price of $113 which seems reasonable since the mine life is not likely to be more than a couple of years otherwise you might use $40-$50 for a long term price. This gives GDN $64 million in ground value at 30% and the new entity $86 million in ground value. We haven’t even deducted royalties or costs.
What value could this possibly add to GDN? This is clearly sub economic and not worth any capital expenditure at this stage.
Over 5 years mine life this would represent $12 million p.a.usd in revenue. Unless they find a lot more they will not dig this up.


“Using my previous "assumed" configuration for the IPO of 75m shares (fully diluted)...from yesterday, which interestingly would just about fund the above cap-ex scenario to get us to production…we are looking at profits approaching some US$0.53 per IPO share.

"A PE of just 5 would result in a share price of US$2.65 per share...which interestingly, some may remember is not far off my $2.56 target from last night, before the numbers were at hand.”

There are no costs, no capex, and a new ratio called PR ratio (Price/Revenue)
I think these estimates are not just poor but deliberately misleading for the mug punters out there.

Pepinnini has 19,000,000 pounds of uranium so if this entity is worth $2.65 a share then the PNN shareholders will be happy at $26.50
But its worth $149 million only so at 10 times the resource of GDN you would have to be generous to value it at $14.9 million imo.
And most people are aware that these U stocks are already over priced.

andrewe