bdo valuations, page-19

I’m not sure that we should dismiss Coalking’s comments about the $2.88 Intersuisse valuation. It was a legitimate report from an analyst and does warrant some discussion because we will see more analyst’s valuations at a later date.

The intersuisse report was done in September 2010 and is wildly different to this Ravensgate report now issued. I expect that the main reasons for this difference is the different valuation method used.

The authors of this Ravensgate valuation are classed as “Experts” and “Specialists”, not stock analysts.
As such Ravensgate had to LEGALLY provide a VALMIN compliant valuation of the projects.
This report was prepared in accordance with the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (The ValMin Code) and this code is binding upon “Experts” and “Specialists”

The applicable valuation is derived from an analysis of the resource bases in conjunction with the Multiples of Exploration Expenditure, Joint Venture Terms and Comparable Transactions valuation methods. The Multiple of Exploration Expenditure (“MEE”) method can be used to derive project value,when recent exploration expenditure is known or can be reasonably estimated. This method
involves applying a premium or discount to the exploration expenditure or Expenditure Base (“EB”) through application of a Prospectivity Enhancement Multiplier

All sounds complicated and messy to us laypeople but basically it seems they were not allowed to value the Irvine project the same way a regular analyst / accountant may value a project, via the traditional and well accepted NPV method. The intersuisse report used the NPV method for a 20 year project.

The Ravensgate report used a “value it as it is now" method, using to a large extent an analysis of how much PLV has spent so far on exploration expenses. CHALK AND CHEESE – legal method brick walls.