If you think that the market is turning round and the June...

If you think that the market is turning round and the June sell-off is complete this is a gold/silver play - OMG I saw this in the Australian today

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..... at yesterday's closing price of a princely 9.7c a share, the company has a market capitalisation of $8.4 million, or an enterprise value of $4.8m when you knock off its last cash balance of $3.6m.

While the company is on the small side of things, the same valuation metrics that apply to the bigger companies and which currently point to valuation upside, also apply to White Rock.

That's because the company already has a resource of 284,000 ounces of gold and 23.3 million ounces of silver (730,000oz of gold equivalent) at its Mount Carrington project near Drake in northern NSW. So it's trading on an enterprise value of less than $7 an ounce. That's all of one-tenth of what RBS Morgans says is the gold sector's average.

Now obviously Mount Carrington ain't all gold. But do the same metric on its gold alone and it comes in at $17 an ounce. There are some reasons for the discount. Not the least is that Mount Carrington won't be in production until 2014 at the earliest. And then it is the rebirth of a mine, which between 1988 and its closure in mid-1990 struggled to overcome poor silver recoveries. Mind you, gold was $US370 an ounce and silver went for $US5 an ounce when it was closed.

So on metal prices moves alone, Mount Carrington (there is no mill there but it is on the state power grid, has a tailings dam, fresh water supplies and an all-important mining licence that's good until 2020) is deserving of another shot.

As it now stands, Mount Carrington has the potential to start out as an annual producer of 50,000oz of gold equivalent.

Market confidence in that -- and the potential for a re-rating of White Rock in the process -- is in line for a boost towards the end of the quarter when the company releases a scoping study into its plans.

All eyes will be on metallurgical studies into optimising metal recoveries. A finding that a flotation circuit to produce a silver/gold concentrate will deliver the best financial returns is expected.

That won't be the end of the story because one certainty about White Rock is that it has tonnes of exploration upside inside the 500 million-year-old collapsed volcano that hosts Mount Carrington and other historic workings. The hope is that, in time, enough resources will be found in the region for the initial modular treatment plant to be upgraded to handle a charge in production to 100,000 ounces a year gold equivalent.

There has been some early promise on that score from the drilling of the first of 40-plus regional targets. A decent nearby high-grade silver discovery called Mozart was recently reported and, 15km to the north, the Red Rock prospect threw up decent gold intersections near surface, as well as zinc at depth.