proper valuation less than 25 a share, page-9

More research for all you guys... :) I think you owe me a few beers..

I came across this presentation by TRO at the EXCELLENCE IN MINING & EXPLORATION CONFERENCE on the 8-10 OCTOBER 2006. In it, they compare Market Caps between TRO and some other companies.

It seems easiest to compare TRO to JML (Jabiru Metals). Jabiru is also an up and coming Zinc Miner, which look like it will start producing at the end of 2007.

The quote below is from a very recent release (24/10/06) by JML..

"Overall, our total reserves have increased from 1.6 million tonnes to 1.714 million tonnes at 3.0% Cu, 11.3% Zn, 0.7% Pb, 115g/t Ag based on similar mining and metallurgical parameters to previous reserves."

So comparing the two.....

TRO - $77M Market Cap - 10.1 Mt @ 10.2% Zinc.
JML - $300M Market Cap - 1.7mt @ 11.3% Zinc.

Now, TRO has 5 times the amount of metal in the ground and based at their close of a SP of $1 are about 25% of the market cap. So.... a share price of $4 gives them a similar market cap (but more than 5 times the metal) and a share price of $20 gives them the same Zinc in ground to Market Cap Ratio...

Upside?? You better believe it!!!!

There are some differences obviously... some better some worse.

1. JML will have a mine up and running 12 months earlier.
2. The JML orebody is much deeper in the ground.
3. JML is at 1% higher grades.
4. About 100,000 tonnes at JML have to be replaced by Concrete (which is obviously at a cost.

So, what does this all mean to the SP? Well, I think it is obvious...