Ann: 2009 Ore Reserves and Mineral Resources Stat, page-8

re: Ann: 2009 Ore Reserves and Mineral Resour... Trying to read between the lines here, and assuming their lower estimate of gold at $AUD 850 per Oz

Conservative Estimate

Shares On Issue 1,500,000,000
Cost Per Oz 700
Gold Price 850
Profit Per Oz 150

Per share value 0.2571


Reduce Cost

If they reduce their costs to 600 per Oz

Shares On Issue 1,500,000,000
Cost Per Oz 600
Gold Price 850
Profit Per Oz 250

Per share value 0.4285


Higher Gold Price and Lower Costs
Assuming Gold at 900 per Oz and costs at 600 per Oz

Shares On Issue 1,500,000,000
Cost Per Oz 600
Gold Price 900
Profit Per Oz 250

Per share value 0.5142


Playing around with it it seems that the major thing is cost per Oz not the gold price for this one - and that is a depth issue I think. The higher value reserves for a given amount of work is deeper.

So imho and taking a very conservative view based on reserves only - not plant and equipment etc, it is worth say 0.25c and anything else is icing on the cake.

As it digs deeper and the cost per Oz goes down regardless of the gold price then it becomes much more attractive.

But SBM being SBM - anything could happen, so perhaps given the track record recently and factoring in risk, it may not be far from fair price - under extremely conservative estimates.