A useful yardstick to value ASX junior gold companies right now is Gammon Gold's friendly all-share takeover offer of Capital Gold (CGC) announced overnight (TSX exchange):
The deal values CGC at $C 168m ($A 200m), a heap leach open pit producer since mid 2007. Production rate is 50k oz pa increasing to 70k oz pa in 2009. Current cash cost is very low $US 255 ($A 390) per oz.
CGC has proven and probable reserves of 832k oz. I calculate it to have a further indicated resource of 853k oz (their announcements only explicitly state reserve ounces). So reserves plus resources = 1.68m oz.
CGC is unhedged and its market cap would be very near its EV (cash is $A 10m and they would have negligible debt given the low $18m capex to bring the operation into production).
