i hate it when i am this right, page-49

re: ****for tastarga**** Goldbars, there is no such thing as industry price estimates for gold in the ground.
The occassional broker tosses these up for historic takeovers by the larger mining houses picking up resources that turn into mines in most cases.-nothing more than a reference point out of curiosity value-NOT MARKET VALUE.
If you want a relevent reference point for mining valuations, have a look at one of the Grant Samuel independent reports prepared for the MIM/Xstrata merger, or better still , the Normandy takeover by Newmont. There you will see standard industry practice-DCF after tax based on WACC.(This jargon is explained in those documents, but in lay terms it means the present value of all the profits the project will make)
Picking an arbitrary figure of $10 is totally irrelevent to any one orebody. A remote mine of low grade, with no supporting infrastructure will obviously have a lower value than an orebody containing the same number of ounces but at much higher grade 5 kms from Kalgoorlie.(All other things being equal, eg metallurgy and so on).
The hardest trick is to value a large orebody that is sub-economic, such as Boddington-though it is approaching economic!-which has been sitting there for a decade without a decision to mine. What is its value?
An "option" model may be appropriate? Once again that is a model, not a fixed figure per ounce.
Then we can have a discussion about the different JORC categories , but we can leave that for some other time.