Brightstar ( more like a blackhole over the last 18 months!! ) has suffered from a large over estimation of the grade and consequently reserves contained in the areas that have been mined from commencement. Time to take a look at a fagpacket valuation.
If we value the latest ASX release on a $40/Oz for Measured Reserves and $10/Oz for Indicated and Inferred Resources the value for CTW and Ben Hur should be around $6.323M. If the value of the Processing pLant and associated infrastructore is about $30M the the resale value may only be roughly half of this realising about $15M. Total Value about $21.323M Debt to Watpac about $10M for Nett Value of about $11,323M This value does not include Alpha, Kennecoot or other deposits or tenement holdings.
With a total current shareholding of about 20M give or take a few the value per share should be a minimum of 5.6c per share. Alpha should produce about 13,000 Ozs of gold generating roughly profit of $10M. This obviously has to be proven but if true the value of the shares should rise by an appropriate amount as the debt to Watpac can be retired. Alpha should take about 4 to 6 months to mine so do not be too hasty in dropping your SH yet, see what transpires over the next few weeks and months and what resources and reserves are still to be reported on. Also would be nice to see a reconciliation from projected Ozs to that produced from the commencement of mining by A1.
Upside is the aditional reserves and resources still to be disclosed and the gold price stronger. Downside is the vulnerability to Watpac and lack of information being released to the market
AAM Price at posting:
5.5¢ Sentiment: ST Buy Disclosure: Not Held
