Ann: RC drilling confirms large scale gold system at Hemi, page-125

It's interesting how different people come up with very different numbers on the potential for new resource inventory.

Shamer's geologist goes for 1.5m new ounces across Sections A and B... but others were posting earlier with estimates of two or three times that!

My own take is that the current market cap is about A$240m. Divide that by A$75 for an average(ish) value of each ounce of gold in the ground (for a company at this stage in the cycle) and you get 3.2m ounces, or a little below your own estimate of 3.7m.

This is all guesstimating, but the good thing is that a resource of 3.2m-3.7m ounces no longer sounds quite as far away as it did before Xmas – given the resource that already exists, plus what seems to be taking shape at Hemi.

What's really exciting is playing around with the value of each ounce in the ground and seeing what that does to the valuation. Is $75 per ounce too low, for example, what with the higher grade gold, the prospects of a higher gold price, and the chances of lower-cost open pit mining? Can DEG shift more of the resource into reserve? Then there's the prospect of finding another Hemi in the same district (a few posters saying that these type of intrusion finds come in clusters?). If we got both (another big find, plus a boost to how the resources are valued) DEG starts to look completely transformed from where it was just a few weeks ago.

On that basis I haven't sold much of my original holding yet. Greed is overcoming fear, for the moment at least.