S. R.,
Why do you think TKOCF will not be sold at US$ 15+? Using a very rough estimate, I figure US$15-18 buy out price is quite reasonable even at current gold price.
If I am not mistaken (sorry, don't have my notes with me), the total shares outstanding (fully diluted) is around 17 million shares.
At US$ 15/sh buy out price,
US$ 15/share * 17 million shares = US$ 255 million.
There are 10.5 million ounce of gold and 3.7 billion pound of copper. The way I figure it, currently gold is around US$ 280/oz and copper is around US$ 0.80/lbs. The multiple is around 350x (280/0.80). Let's just assume the multiple is around 500x as a conservative estimate. Thus, 3.7 billion lbs of copper is more or less equivalent in price as 7.4 million ounce of gold ( 3.7*10^9 / 500). With that assumption, the total price of TKOCF can be assumed to be (10.5 + 7. 4 =) 17.9 million ounce of gold.
At buy out price of US$ 15/sh, the price of gold reserves is:
US$ 255 million/ 17.9 million ounce of gold
= US$ 14.25/oz of gold.
US$14.25/oz is not a high price for reserves. I would think it is quite low. The most recent deal we've seen since the plunge of the gold price is: Homestake-Plutonic deal for US$ 640 million. Skimming through their press release, it said Plutonic has "2.2 million gold reserves and 8.5 million gold resources". Granted that Plutonic has producing mines and properties yet to be explored, etc. But isn't (2.2 million * 14.25 =) US $31.35 million a more than reasonable value to put on the 2.2 million ounce of gold reserves? Hence the soundness of US$ 14.25/oz of gold reserve above?
Regards,
TB |
