gold project comparison

Today Regis Resources (RRL) announced the acquisition of the McPhillamys Gold Project (MGP)in NSW.

MGP purchase value $150m. Contains 57.4m tonnes at 1.36gpt gold for 2.5m JORC ozs. Project area 420 SQ KM.
24 months of studies and drilling required before 12 month DFS period commences. 3 years until DFS complete. Purchase values each ounce of MGP gold at approx $60 per oz.


Whilst not able to accurately compare apples with apples(Africa versus Australia etc), the comparison with AMX is interesting and today's transaction indicates that consolidation in the gold sector is in fact not limited to current gold producing entities. It would seem that gold explorers/gold projects of sufficient quality are still being targeted for longer term value and strategic planning.

AMX Batie West Project. Contains 62m tonnes at 1.6 gpt gold for 3.1m JORC ozs. Project area 2600 SQ KM. Ampella's total market cap is currently approx $105m. This includes cash of around $40m resulting in Enterprise Value of $70m for the entire company's tenements and current known gold in ground. Using the same acquisition metric of $60 value per ounce of gold would mean that at a bare minimum Ampella should be worth $186m for its gold in ground plus $40m for its cash. Total Market Cap $226m or 94 cents per share. Versus 44.5 cents today.

I would argue that given Ampella owns a vast and prospective under-explored gold province, then its blue sky and inherent value should be substantially higher than this equivalent minimum. But 'should' has little traction in the curent market pertaining to West African goldies unfortunately. This tide will turn, but how painful waiting.