valuation guesstimate

Hi guys,

I am sure all holders are thinking whether it is better to hold out LT, or take profits now and move on or hope to get back in cheaper after the cap raising as stags suppress the SP.

The CLN presentation values similar African transactions at $77 per oz, theoretically providing CLN with a market cap of $40m based on their 522k oz.

I think this is a little optimistic ST and I wouldn't be thinking a 30c SP is warranted after the cap raising ($40m market cap) based on where the project is at.

However,

If you use the average Australian per oz transaction average of $35 per oz then a much more conservative $20m market cap is reached, or $15c per share for CLN's 522k oz - of which $3.7m will be cash and only $16m EV.

Given that the current entry price is about 10.6c being (36c+(7x7c))/8 this allows a reasonable buffer for new shareholders of 41% discount to my guesstimate fair value.

Now,

CLN has also indicated that they could increase their resources from Mali West to about 1.1m oz fairly soon (within 24 months) and Mali South offers blue sky possibilities.

A 1.1m oz resource (at least 522m oz being indicated and measured) with an average implied value of $35 per oz would give a fair value of $38.5m or (based on 133m shares) a per share value of 29c...

IMO, heaps of upside potential at these prices still and CLN will retain $3.7m for working capital to further develop their project(s).

In addition, there is downside protection given the low per oz cost of production in Mali (if POG falls) and there are significant international players already investing in Mali (if CLN want to sell their project).

Cheers
John