what is cah worth?

Some would say the answer to this question lies with the market i.e. whatever investors are prepared to pay. However, because I haven't been able to find any analyst reports on CAH, I am left wondering what price would be reasonable in the current market…i.e. how high will it go!

There is a thread on the GOLD forum started by RichardPossum which describes a way of calculating the price/worth of a junior goldie. It apparently comes from Frank Holmes (whoever he is).
http://www.hotcopper.com.au/post_threadview.asp?fid=1&tid=847809#3823190

The calculation is 10% of POG X JORC in situ reserves

For CAH this is 145 X 738,000 divided by shares on issue (518 mill) which comes to 20.7c/share.

Holmes also reckons that the reserve should be >1 mill oz to warrant investing. Presumably CAH will go well over this limit once the Goldfinch JORC is announced next month. He also says a grade >2g/tonne is necessary. Here is where CAH comes up a bit short. However, with the current and likely increasing POG, presumably these lower grades are more likely to be profitable.

So, comments on the above calc please – I am a dummy in this area. What effect does full funding for production have on the above calculation?

Flyman