West Aussie is quite rightly referring to insitu value , that is...

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plough

34,268 Posts.

1907

05/02/24

09:35

Post #: 72235138
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Originally posted by Ty Cat Mac ↑

WA

Forgive me if I am wrong but I thought they valued the gold in ground at around $100-$150/oz, not the spot gold price & if that is correct 318,000 oz is worth around $31.8m to 47.7m in the ground

With 5.6b SoI you would need 5M oz in the ground (value $500m to $750m) to get the SP to 10c

Happy to stand corrected on how the gold in the ground is valued - all I can guarantee is that it wont be the spot price

If you look at it on an earnings basis then lets assume a cash profit of 1500/oz (possibly wildly out) then to earn 10c/share ($560m) the company would have to produce 320,000oz/year. You would need a resource of 10 times that so they could mine for at least 10 years!! Earnings of 1c/share (ie mining only 32,000 oz) might get the SP to 10c on a PE of 10

All my figures may be way out but we have to walk before we run & be realistic about the company's prospects - I'd love to see the shares at 10-20c but I think that is a long way off

However you cut it, with 5.6b SoI, OAU needs a humungous amount of gold in the ground to move the SP needle

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West Aussie is quite rightly referring to insitu value , that is not what the resource is worth to a buyer of the resource or to the company ,
Insitu value is the Resource in ozs multiplied by the spot price of gold
Marketable value per oz is price paid for resource or price paid for the company divided by number of ounces

Down the road, MGV got bought out by RMS , last year , think on a Market value basis RMS got MGV for around $180 to $200 an oz .
200 an oz is higher than the average paid by other companies which is around $100 an oz
MGV did have one deposit called "break of day " that was open pittable ' from memory it was relatively high grade about 4 grams a tonne , which may be why RMS paid twice the going rate .

Last edited by plough: 05/02/24

OAU Price at posting: 0.7¢ Sentiment: None Disclosure: Held
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