DEG launches placement, page-59

Hi CounterVin

My formula is just a very simple back of the envelope calculation of 2 million ounces (proven and probable prior to the Hemi discovery) divided by 1,100,000,000 shares on issue.

Argonaut has estimated Hemi at 1.2 million ounces (a vast underestimation imho) lifting the total ounces in the ground to 3,200,000. So now it should be 393.75 shares to the ounce of gold despite the subsequent dilutions of options being exercised and capital being raised lifting the shares on issue to 1,260,000,000. That will fall back a bit with the new capital raising of an additional 87 million shares (did I get that number right?) bringing the shares per ounce to figure to 420 shares to the ounce. I still own more ounces than I did when I bought (31% more ounces in fact) in so I am a happy camper and I have plenty of upside potential to that most crucial number.

If my math is right that also gives us a share price target of A$6.30 a share based upon the contained gold. That number is misleading as it does not factor in the capital costs of establishing a producing mine and the number of years life to the mine but it is one way of getting a handle on the numbers.