Upside, another way to tackle a resource is similar to the Parrot, but say use his approach to give an approximate value and put a 'range' around it which reflects reasonable currency/commodity price variables. For example, the A$ price of gold, with one or two short term aberrations,. has traded between A$520 to 560 for the past few years-use this for Australian based projects. Then you can use a standard DCF after tax model based on disclosed minelife. Add an appropriate amount for conversion of resource to reserve/exploration potential. This will give you a range.(Then cheat by looking at a reputable analysts calculations to see how they have fudged their figures in relation to the same /similar stock). IF there is a positive maket/commodity outlook and the stock price is below the value range you buy. Conversely, if the outlook is gloomy and the price is at the top end of your range, get out. (And if it is between as it always is, get really confused and talk to a chartist!) Cheers, TAS
