Some would say the answer to this question lies with the market...

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