valuation based on recent news, page-14

Some may disagree or think I am ramping but because of the growing demand for copper with low extraction cost, the gigantean size of Los Calatos, its proximity to smelters on the coast and its suitability as a site to develop into a mine (it is flat not hilly) I believe that whoever buys it further down the track will have to pay at least 12c per pound, particularly if the purchase can be staved off for at least 18 months or more, thus providing some time to significantly prove up more of the resource.

MNC's Q4 report shows that they have ~10.9B lbs of Cu in the ground (includes Mollacas). So applying a valuation of 12c per lb to MNC's assets we get 10.9B lbs x 12c = $1.31B. If we divide this by the number of MNC shares (now 1.456B) we get a valuation of close to 90c per share which is no longer under threat of being halved by Barrick.

In the current drilling program however, MNC has drilled a further 5,247m (not including the hole that missed) which is significant because it is a 25% increase on the 21,000m of drilling which established the JORC resource. Looking at these latest results I would see them as yielding about 15% less on average than the first two drill programs (except for one hole which is considerably better) but to be conservative I suggest that they would add only 25,000tonnes per meter drilled (as opposed to the 44,000t per m from the first two drill programs).
So 5,247m x 25,000 tonnes = 655,875tonnes of Cu or 1.446B lbs. Selling this at 12c per lb this will add close to12c per share to the 90c figure calculated above, raising the share value to just over $1.00

What'smore, this figure can be expected to rise soon as more drilling results are released, and to keep rising !

Management are confident that their current drilling program will enable them to double the size of the original resource by September making it by far the biggest copper resource on the ASX - looking particularly good now with the recent decision to accelerate the drill program. MNC @ 21B lbs (2 x 10.4B lbs) would then be approaching double Equinox @ 11.7B lb (currently the biggest Cu on ASX). We're then talking a valuation of $1.80 per share which is 4.5 times today's SP and represents a market cap of $2.6B.

Barrick's recent bid of $6.5B for Equinoxs 11.7B lb of copper however would make this figure of $2.6B look to be seriously undervalued by at least half.