Why Far is Undervalued., page-33

Hi Mandurah,

There is one point which I feel that might be on the conservative side, the 800 mil figure.

We are sitting on the last RISC report at 640 mil. That was before SNE5, SNE6 and VR1 and the proof of connectivity (so good that the response was immediate).

There is also the RF of 40% that's been thrown around as compared to CNE's 17%. Then there is the figure of 1+bil (I think this was from CN but in what context time wise I am not sure.) The chief geo from FAR also said openly on tweeter that SNE is between 3 to 5 billion, also the context is a bit vague (could mean including other phases as well). However, if you take all these points, I tend to think probably 1 bil or close to that is what we can achieve. I think the release of that audit is not far away.

There seemed a bit of genuine interest last trading session. Wonder if CN supposedly in England has generated more conspiracy theories?

One question for you Mandurah is this, how do you think WPL would work out what FAR is worth, as atm, if the PE is successful, they would stand to lose a lot more than their 35% of 560 mil (what they claim, but I believe the real figure is actually 340 mil B, but we'll play along). I suspect their workings could be biased to the more immediate problem, rather than the future .

If they were to drill for oil themselves, they would spend much more than $4/B and to get to the upgraded figure (hoping 1 bil) and then they cannot be assured of a success. To get the 350 mil B (35% of 1 bil) on top of 196 mil (35% of 561) at say $/B gives $614mil. This is probably where the figure of $500 mil for the worth of the PE came from. That translates to 614/0.75=$AUD821=15c/share.
So based on Friday's close, we should be looking at 8+15=23c. Of course if indeed they were using the 330 mil instead of 560 mil, the it is proportionately higher. Paying for a FAR TO of 23c will assure them of 50% of the SNE asset no if's or but's and they would get A2 and A5 plus Kenya thrown in.

That would however be a gigantic premium. But can WPL, inspite of them saying they'll walk if need be and look for something else, afford to let go??

KKW