what is the true valuation of dml?, page-4

Hi Baron,

I know the feeling. You do your homework and still get burnt usually on the negative side of the resource price roller coaster. The Chinese seem to be the only ones thinking more than a few weeks ahead.

I have liked DML for sometime and have traded but not held stock because I have felt that at $1.00+ a share was too expensive with lots of downside until it was up and running with teething problems behind them.

I like them because in is a sizeable resource at good grades in a stable country with a good labor force. I also liked the fact that they hold a lot of prospective ground and the ore bodies are simple.

I do a very simple share valuation as follows:


Discovery Metals Ltd (DML) Date: 30/06/2013

Assets/Liability Gross Value % Value
($1,000'S) ($1,000'S)

Cash on Hand 21,300 100 21,300
Trade Receivfables 11,000 100 11,000
Plant & Equipment 179,000 35 62,650
Inventries 14,700 100 14,700
Other Assets 18,000 100 18,000

Kalahari Copper Belt
177Mt @ 1.3% Cu & 15gt Ag
at S7,000 tonne & $21 oz 17,849,344 3 535,480



Less Liabilities

Borrowings -151,000 100 -151,000
Trade Payables -27,500 100 -27,500
Other -1,000 100 -1,000
Provisions -5,500 100 -5,500

Other Factors

Blue Sky
Dividend paid
Management Ability
Currently Profitable

Gross Valuatiuon 478,130
Shares on Issue 560,034,418
My Value per Share 0.85
Current Share Price (11/10/2013) 0.06
Market Cap 33,602


I consider them to be worth about 85c a share but this would half due to the Global Financial Situstion and half again due to financial duress making them around 20c a share imo. This is close to the target price of 15c a share with UBS and 25c a share with Blackswan after take over dilution.

Personally I expect a chinaman to pop out of a meerkat burrow and snap them up at 15c - 25c a share. Perhaps OZL should look at them.

Hope this helps and happy to accepted any critism of my logic. I think DML is ridiculous cheap when you consider you get $18,000,000,000 worth of copper and silver in the ground at good grades and a plant for the currect market cap and debt. This is under the cost of the resource delineation and plant replacement. Where else do you find 2,000kt of copper equivalent resource with greens fields exploration. The debt is not large at the front end of a project of this size.

All the best,

Tasidevil