Ann: Borba and Production Update, page-98

As far as I can tell it adds up like this.

The independent report showed 12.7bcf at 2U net to SGC in the first four zones.

It’s hard to tell but I think that corresponds to the four levels in the Kione. This adds up to a raw $63M in ground value.

Extracted over 10 years it gives a NPV10 of $38.7M. This is before any capex to extract or transport to the gas lines or any ongoing operational / capital costs.

That’s the best case here IMO. They only found 92ft / 28m of pay zones. While it’s not clear how this stacks up to the assumptions of the target widths in the resource report , it sounds on the low side to me.

When you take this, the low expected net cash from the Canadian assets ($3M aud per year if it goes well per the interview today), the distance between the company’s expectations and the result (which exposes them as generally over enthusiastic so you have to take them with a big grain of salt), overall I am quite negative on this stock now.

I sold everything today at .036. It might go higher than this in future but I no longer like the risk / reward equation here - too much risk and not enough potential upside to remain invested. Time to take the loss and move on.

Ignore the pumpers and don’t go on “feeling”. Go on hard evidence (to the extent there is any) and do your own maths to figure out your valuation.