I also agree with you ferret. I was put onto this one by my perth broker who thinks its a very good story. Some patience is definately needed here since the feasibility report is not yet released and we don't know much about the sale process of morobe either. What we know is that Lihir and placer are running the ruler over the project and why not! I mean it takes years of work and effort to find huge deposits like this. 6 million plus ounces calculated at around the $270/ounce mark is nothing to sneeze at. To find a deposit this big probably would cost 20 or 30 dollars per ounce overall. Now someone can just walk in, pay a premium and start mining at a time when gold is going higher. Its not bad ha! Certainly a very precious asset AUG owns.
With gold tipped to reach $350/ounce, it could easily become a 10 million ounce deposit which is one of the largest in the world and will not be ignored. It would rival Newcrests telfer mine. No doubt about it, the AUG share price is going much higher when more information comes out provided its positive and provided the gold price doesnt tank. Sir Ron Brieley knows that and this is why he wants to sell morobe now. Its a perfect time to sell the deposit with gold going up and then pay himself a nice little dividend.
If you read the part A target statement of late last year, you will note the mid point valuation for AUG's share of morobe assuming a gold price of $300/ounce is approx 35 cents per share. They say with every 10% increase/decrease in the price of gold, this affects the morobe valuation by 47%. I note that gold is almost 10% higher now!
$3 PER AUG share for the morobe asset im not so sure about. I would love to see how they come up with this valuation. But if you assume they flog it at an upside price of say $40 per ounce, that would be 120 million dollars for AUG's share which equals 74 cents per share plus whatever cash and other exploration assets they have. I know it sounds unachievable, but deposits of gold and silver of this size are rare, very rare indeed. We all know what rare things are worth in society today!! Certainly one to watch and one i'm starting to get excited about. Downside risk is still substantial, possibly down to 12 cents so this needs to be weighed up also.
