The events of the last 24 hours have provided a clear and...

The events of the last 24 hours have provided a clear and undeniable indication of the short term potential of VIL.

While slight forward movement of the VIL SP over the last week or two has provided a return of between 30% and 50% off its recent low point (depending on what time yesterday you took your measurement), a simple comparison with its JV partners and peers indicates that it's potential appears to be currently massively undervalued.

By now most will have read the announcements from VIL and Caza regarding Bongo and what is emerging there. While VIL is only a junior partner in Bongo its value shouldn't be underestimated. Caza which controls 45% of Bongo (compared to VILs 12.5%) has seen its share price increase approx 600% from its March low on positive announcements about Bongo. They now have a market cap of in excess of $40mil compared to VILs $17m.

While this demonstrates the value of VILs stake in Bongo which appears yet to be included in VILs share price, more importantly it demonstrates the massive potential of Fausse Point which after incorporating the PASS stake, VIL will control 72% of FP.

I believe that VIL is substantially undervalued at present and while Caza price movement in recent days show how quickly VIL may be revalued, the question remains, how do we place a short term valuation on VIL ? I thought I'd try a quick back of the beer coaster calculation to see what number I could come up with.

I believe that FP holds significantly greater potential than Bongo but a shortage of actual data to quantify either leaves me to conservatively value two in the same way. So Caza's market cap has increased by approx $35mil on the back of Bongo announcements. As they have a 45% interest in Bongo that equates to $778k per percent stake in Bongo. If valued similarly then VILs 12.5% stake may be worth $9.72mil.

If we conservatively value FP using the performance of Bongo for Caza, then the 72% stake in FP equates to $56mil for VIL. While I think this ignores the massive potential of FP#2 it does provide a baseline value for calculating the short term share price potential. This indicates that VILs stake in FP and Bongo alone are worth in excess of $65mil.

Ignoring all the other assets, opportunities, income etc that comes from the Pass merger, and accounting for the issue of additional VIL shares to Pass holders during the merger, a diluted short term price target of 6.3c seems quite possible.

In time FP#1 and FP#2 will be fully realised and valued properly. Additional Bongo wells will progress and newly acquired Bullseye & Bowtie West prospects will offer additional opportunities. Chuck Silverwood into the mix and $65mil is probably but a fraction of the real value which will unfold.

Either way Fridays 2.5c closing price still looks like an absolute bargain. FP is now moving forward and Bongo is looking great so a 150% short term gain is my prediction but we saw it run close to 10c earlier in the year in FP speculation alone. Who knows where it could go to with so much more potential and many short term announcements due.

Please note: These calculations and estimates are for discussion purposes only and are not investment advice. The calculations exclude many factors including current market sentiment. I also proud to say I purchased more VIL stock a few weeks ago as I declared at the time and I am a longer term holder, not a trader. This is opinion only so please don't shoot me when the SP goes to 12c and I only predicted 6.3 !!!!