Hi SnowKat,I’m quite new to this so not sure if this is correct...

Hi SnowKat,

I’m quite new to this so not sure if this is correct or not, if there are more experienced investors reading I’d appreciate any comments?

I found this site useful:
http://www.stockhouse.com/columnists/2010/feb/1/valuing-a-junior-miner-s-gold-in-the-ground

Things to consider when valuing a gold mine:
1.Proven and Probable Reserves
2.Cash Cost per Ounce to produce
3.1 and 2 give will indicate a rough - Mine Asset Value
4.Costs incurred to get to production ie. Loan or debt
5.Gold price

From what I’ve read gold in the ground is valued using a standard of 3 groups:
a) Inferred
b) Measured & Indicated (M&I)
c) Proven & Probable (P&P)

Latest prices I can find are:
a) US$20 per ounce Inferred
b) US$30 per ounce for M&I
c) US$160 per ounce for P&P

So, Spring Hill has an indicated resource of 450,000 oz gold.
Current Measured & Indicated gold valuation price = US$30/oz
450,000 x 30 = 13,500,000 US$, approx GB£9 million, approx A$13 million.

Thor own 51% of Spring Hill = A$6.6 million or GB£4.5 million

If Thor could 'prove' resource then that value might increase 5 fold to A$30 million plus. Maybe thats why Mick wants to develop SH further?

Looks a good asset to me when you consider other factors, location, proximity to utilities, roads, largely surface resource....

thats my tuppence worth...
MT