DFC calculations aren’t completely forward looking in the sense they are calculated based on information that is on the table. The impact of mine funding on the share price is practically impossible to make forward looking statements about because in EXU’s case there isn’t any firm information on the table about it.
These valuations are snap shots of value at any one point in time.
No doubt there will be risk of dilution with funding but at the same time we don’t know what the next $8 million of spend might bring. The project could look different by the time the funding decision comes along and/or the gold price and gold sentiment could also have changed. That’s just the nature of exploration and development with these companies. From a recent bad experience with one of these developers I’m in favour of leaving the gold in the ground for all of these developers until the time and price is right. That is one of the advantages a developer has over a producer. They have more ability to time the market. A producer is a price taker when the gold price and gold sentiment is low. Developers can put the foot on the brakes and work up their projects while sentiment recovers. I think not enough boards are thinking strategically when it comes to the speed of development. They just become price takers and the banksters end up having a field day. What I like about EXU is that they appear to not be getting rushed or pressured into anything, even when their cash is desperately low. Esh
EXU Price at posting:
8.8¢ Sentiment: Buy Disclosure: Not Held
