chart and valuation discussion.

http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=AU%3ASBS&time=&freq=

STO=71.8

When a certain announcement occurs, something drastic can happen to a chart eg, the market thinks something is worth $50 mill and there is a takeover offer worth $100 mill.

One can expect a very steep graph indeed where the normal trend is suddenly interrupted. That does'nt mean that the trend ought to be back to what was previously "normal".

FA takes over and where possible, a new value is calculated. The market may then finally adjust to a value it wants to trade.

At the moment is tries to trade sideways and in the next few days, a better picture will emerge.

We do need to add the worth of SBS' remaining assets to those to be taken over (ASMARA).

These remaining assets could be close to close to say 10 cents per share. In practice, the market may pay less, depending on the Gold price and the price of other metals, SBS has.

Based on the previously mentioned 308 mill shares, that would be 30.8 mill which is not that high because these assets are valuable (Barrick, the JV partner has 4 drills working on one asset further South).

But, assume the market wants to pay 7 cents per share for those, instead. The current price is 10.5 cents/share, leaving 3.5 cents for the Asmara Project stake.

One should ask if this 3.5 cents is too low. IMHO, it certainly is.
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Previously, I calculated the SBS' Asmara stake to be worth 42 cents per share but market wise to about 25 cents. That was based on a 50% stake. However, apparently, it is 36%, so the Asmara stake could be worth some 36/50*25 cents= 18 cents per share.

Add the previously discussed 7 cents for the remainder of SBS' assets and we get a total guided target of 25 cents/share again.

As mentioned, the market pays 10.5 cents/share for this total.

Subject to audit,

Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks or metals/commodities.