Gold and Silver Juniors, Mid-tiers and Producers Message Board

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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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From: Ed Ajootian	11/19/2005 4:41:46 PM
	Read Replies (1) of 78421

I hardly ever invest in gold stocks but I got interested in a junior gold company trading in Canada, as a result of a hype luncheon they gave. Was wondering if I could ask some basic questions about gold stock valuations. This company does not have any reserves as defined in Canadian standard 43-101 (or #'s similar to that), but they are supposedly about a month away from getting a report out that will be 43-101 compliant. 1) Is there any rule of thumb for how much the market will value an ounce of gold in the ground these days, where the gold is included in a 43-101 compliant study? Does this vary a lot depending on the projected costs of extracting the gold, and if so how do you make this adjustment in figuring a present value for the gold in the ground? 2) Does the market place a discount on the above valuation if the company reporting such reserves has no cash? If so, is there any rule of thumb as to the % discount that would be placed on reserves held by this kind of company, vs. a company that has the cash in hand to develop the reserves? Thanks in advance for any help.

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