how to value a junior gold, page-191

Here is some more grist Richard and friends.
I took data already found on the current spread sheet and used that to get a rough estimate of value of inground resources to Market cap. Looking at the recommendations from the excerpt below you can check your own favoutires.

http://www.kengerbino.com/12guidelines.html

Value per ounce:
How much you are paying for the gold in the ground is an important stat. The lower the better. The following guidelines relate to a $350-400 gold price. If gold were to go higher these numbers would increase. For advanced exploration companies, try and stay in a valuation range around $15 per ounce of resource in the ground. As an example, a company with 15 million shares outstanding selling for $5 per share has a $75 million market cap. With a 5 million ounce resource, the market cap. per ounce is $15. As companies move up the food chain and expand and define the resource and test metallurgy and do engineering studies, the market cap. per ounce should go up to $30-50 per ounce. Depending on the quality of the deposit these valuations can change.

Producing companies if bought out, can go for $100 to $150 per ounce of “reserves” in the ground. That is an important guideline. You do not want to buy a stock where you are already paying $100 per ounce for just a “resource” (which means the “reserve” will actually be lower). With the company just in the advanced exploration stage, there wont be enough upside unless the deposit gets a lot larger. Advanced developmental (meaning feasibility to actual construction) companies can be bought out for $40-75 per ounce of resource or much more depending on many factors that are beyond the scope of this writing.

Usually the value of the ounces and the stock price go up as more and more confidence is gained in the project. Initial resource definition usually allows for a value of $5-10 per ounce. At the bankable feasibility stage those same ounces could be valued at $40-75 per ounce.

If you see a mining company with a well defined resource and the gold ounces are valued at only $5 per ounce or so, just know there is probably a reason and it is probably bad. Most likely those ounces will never see daylight due to any number of reasons: environmental, logistics and infrastructure problems, political risk, low grades, high capital costs, narrow mining widths, high strip ratios (how much waste rock has to be removed to get to the ore in an open pit operation) and a host of other reasons. There is a right price for the ounces, don’t overpay.