more research - bell potter, page-6

The Bell Potter boys 12-month target assessment (17c) is based on anticpating a 50% increase in copper from what is there now (400kt to 600kt Cu). It says "with a 50% increase in resources to 601.5kt of contained copper we arrive at a valuation of US$168m"

The Argo valuation (17c) was based purely on what is there now... or something less... and then adding a footnote about what Might Be. (Includes their high Capital Expenditure of $250m over the 8yr mine life.)

Both look good, BUT in order to truly compare these reports I feel one needs to have them work from the same resource base or they are different studies.

Taking the better scenario, that is, turning the Argonauts loose on the "anticipated" 600kt resource, their Valuation might be more like 17 x 1.5 say = 26c in 12 months.

Much nicer!

OR

simply look at Bell-Potter table of expl/dev. companies.
Enterprise Value per tonne contained copper Average is $333 with upper ones of $465 and $460 being in Africa (Botswana and Bongo Congo!) and Hillgrove at $741! (same tonnage as AVB but lower % at 0.9% compared to 1.23%)

Select an upper $465 DML, although this is very conservative given AVB is superior in ALL mine aspects.

600kt x $465 = $279m EV. If current AVB EV is $80m then the EV should go up by a factor of 3.5.

Thus Share price should go up by about 3.5 in 12 months... I will say 3.

9.5 x 3 = 28c

This is more in line with the Argonauts projected calculations.

So if the contained copper resource goes to 600kt in 12 months and Real mining and its corporate re-rating is around the corner, then ....

Perhaps the TRUTH is somewhere between 17c and 28c target SP in 12 months... as best as can be guestimated. Then again who knows.... polish up that crystal ball.

cheers, PP