how much longer can this stay under the radar?, page-8

Had a go at valuing AAG below. If you can identify any faults please let me know. All numbers in AUD.

CAH preso "Gold Investor Roadshow" August 2010 has a slide on page 9 with the following metrics (roughly as they are bar graphs without much detail):

- $220 EV/reserve ounce
- $130 EV/resource ounce

Using these as a proxy for AAG (which seems reasonable given the size of the resource is similar although CAH is hitting production so this is a forward looking target based on zero dilution) I get a valuation of 97 cents per share undiluted.

If you use the mid-range targets from AAG's own preso in London July 2010 of $55 EV/resource ounce(for SIH which is the median on the graph) and assuming a conservative $150 EV/reserve ounce I get a target of $0.41.

That's based on current KNOWN JORC. Not including any upgrade.

Add cash @ roughly 3-4 cents a share.

Assuming upgrade adds 500k ounces overall and 250k of this are reserves I get price targets of;
- $0.67 undiluted based on SIH numbers
- $1.41 on CAH numbers (although I'd caution against using these metrics until we know exactly how the funds will be raised for the mine)

Assuming full option conversion valuations per share based on SIH numbers almost identical.

Base case valutaion (current JORC only, discounted in ground valuation, unfavourable exchange rate):
17 cents, plus 4 cents cash

Mid-range:
$0.41 - $0.67

High range:
$0.97 - $1.41

All are realistic targets given metrics are median/average. Current share price is below my baseline valuation when cash included.

JT