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Gold/Mining/Energy : Medinah Mining Inc. (MDHM)
MDMN 0.000001000-99.0%Jun 3 1:07 PM EST
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To: Coz who wrote (14103)5/20/1999 1:23:00 PM
From: Mike Gold  Read Replies (5) of 25548
 
CALCULATING SHARE VAULE OF GOLD STOCKS:

Wonder why we are at 37 cents? Here's a formula that is useful in determining share value of a gold company:

Share value= ((Gold Equivalent grams/ton * Buyers Value)*Tones of ore)/# of share diluation)

Assumptions:
a)Gold Equivalents: grams/ton=combined value of all metals.
b)Buyers Value: What a buyer will pay per ounce of GOLD EQUIVALENT in the ground(+/-$40/ounce)/31.1035 grams/ounce=$1.28/ounce
c)Gold Equivalent grade= 1.5 grams/ton
d)Quijano holds 20% interest in any PROFIT from the Lipangue-this would not include a buyout-only a operating mine.
e)Tons of resource: 25 million as estimated by Greg Lillar
f)No value for Los Dos Marias because reserve amount has yet to be estimated.
g)No value for any potential beyond the inferred resource
h)Total common shares plus converted preferred=110 million shares

Using these assumptions-we get:

Most Conservative scenario(assume 25 million tone reserve):
(1.5*$1.28)*25,000,000/110,000,000= $.44/share

Most Optimistic scenario(assume 3 billion tone reserve):
(1.5*$1.28)*3,000,000,000)/110,000,000= $52.36/share

Try it out on your favorite gold stock and see how close you come to the current share price. Cheers.
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