re: comparison of pjo and bsg MARKET VALUATION OF PJO and...

re: comparison of pjo and bsg MARKET VALUATION OF PJO and BSG.

C$=A$1.16099

Share prices:
PJO: C$7.50
BSG: A$1.795

PJO-Shares: 81.5 mill and 5.8 mill Warrants/Options. The latter have some time to run, say equivalent=1.5 mill shares. Total 83 mill shares. Cash C$7.5 mill.

BSG-Shares: 277 mill and 9 mill unlisted options ( 10/8/08, @27.8 cents)-Say equiv=3 mill shares. Total shares: 280 mill. Cash, say $30 mill.
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Market CAPS in A$:

PJO: 83*7.5*1.16099=A$722.71 mill + $8.70 mill cash, a total of A$731.41 mill.

BSG: 280*1.795=A$502.6 + $30 mill cash=A$532.6 mill. Their share in the PJO subsidiary is 78.0% or A$570.5 mill (Their share of PJO's 81.5 mill shares was 79.44%)

That leaves a shortfall in the PJO stake of (570.5 mill-532.6 mill) or $37.9 mill or 13.5 cents per BSG share ( Note that PJO rose 4.6% overnight or 11.6 cents per BSG share).


CONCLUSION: BSG's share price has to rise first to make up the shortfall on their PJO stake or $37.9 mill mill; then add the value of the BSG's own Mexican assets and those of Perth.

Assume their own 100% owned Mexican assets are worth $60 mill and their Perth assets say $4 mill, then the total shortfall now is is $37.9 mill +$60 mill +$4 mill=A$101.9 mill or 36.4 cents per share.

+ + + So, instead of $1.795, the BSG share price ought to be about $2.15.

Note: The actual BSG cash assets are not known. They did have some $30 mill some 6 months ago but have since sold their PJO warrants and some or all of the cash received was used to settle a debt. But they also received US$10 mill from Georgia.

Subject to audit,

Gerry
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