valuation??

Let's have a stab at a valuation.

NPV of Shambesai leaching project.
- coy has used a DCF of 12% which they acknowledge is very conservative. UBS use a DCF of 6% in valuing their goldies.Refer ADU Sept. 2011 report. At a DCF of 9% this project would be valued at $68m.

Valuation of Resources
- after leaching process Shambesai should be left with about 400,000 ozs (my assumption) plus 410,000 ozs at Obdilla. At a valuation of $100 oz this values the remaining resource at $81m.

Total enterprise value is therefore $149m. Note minimal cash/debt on hand.

Shares Issued 119m
Options Issued 86m

Value per share (after options are excercised) $149m/119+86 = $0.73 per share

Current share price of $0.26 is therefore trading at a discount of 64% plus there is further exploration upside from their 4200km permit.

Note: the timing of the excercise of the options fits perfectly with the capex requirements of the leaching project.

14m options to be excercised by 31/12/2010 @ 0.25c will raise $3.5m

63.4m excercisable by 31/12/2011 @ 0.20c to raise $12.7m

Initial capex reqd is $16m.

Thoughts?

Elephants in the room are MHM and MSR