something for nothing

This from Criterion - The Australian - 27 -7 - 07 :-

CRITERION'S shell-likes always flap when something for nothing's on offer, even though most "free" things -- such as Henry Kaye's property seminars -- are anything but.

On their current valuation, Minotaur shares offer a free ride on the gold and base metal hopeful's activities, the most advanced of which is its Tunkillia gold and silver deposit in SA's Gawler Craton region.

Minotaur's claim to glory was discovering the Prominent Hill copper deposit in South Australia, sold to Oxiana in 2004. The deal saw Oxiana take over Minotaur Resources, with Minotaur Exploration relisted (sans Prominent Hill) in February 2005.

Since then, Minotaur has also amassed a portfolio of investments in other listed miners, notably a 25 per cent stake in uranium explorer Toro and a 30 per cent stake in runaway hot-rock seeker Petratherm and 19.8 per cent of Mithril Resources.

All up, the portfolio is valued at $60 million, or 92c a share. Minotaur is also sitting on cash of $6.72 million, or 10c a share, which means the stock is trading at a 16 per cent discount to its tangible assets.

"It's a little bit of an anomaly," chief Derek Carter says of the negative value ascribed to Minotaur's tenements, which cover 40,000sqkm of dirt in SA, NSW and Queensland.

Minotaur, 51 per cent holder and operator of Tunkillia, recently upgraded the resource to 800,000 ounces of gold and 1.6 million ounces of silver. The next step is a scoping study.

Carter says Tunkillia is "nice to have", but he's more excited about unearthing "another Prominent Hill" at its unexplored developments.

The company expects to spend $6 million on rock kicking in calendar 2007, with $3.5 million reimbursed by project partners.

Carter says he's baffled by the market's valuation of his stock. The only explanation offered by brokers is that Minotaur's portfolio would slump in value if Minotaur were to sell out.

We rate Minotaur a speculative buy. Some times the best things in life are, indeed, free.