AN ESTIMATED VALUE OF THE COMPANY
inferred reserves are 5,000,000 tonnes
caret count per study/audit is .38 to .45; say .42
estimated profit inferred from study is about US$1,000 per carat
output is from 25,000 to 50,000 carats per year
cdn dollar is about 1.50 to us dollar
aprox 10 million shares will ultimately be issued
Option 1 values assets on breakup and assumes that discount for stones in the ground is similar to gold, that is, about 30 cents on the dollar.
Option 2 net present values the cash flow over 40 years at a risk of 16%( this is about 6.5 times if you check your tables)
#1
5 million tonnes times .42 gives about 2 million carats; at $cdn 1,500 per ton times 30% this gives us about 900 million dollars of market cap; spread this over 10 million shares and you get 90 dollars per share.
#2
35,000 carats at $cdn 1,500 times the 6.5 multiple you get a market cap of about 350 million, spread over 10 million shares again and you get 35 dollars per share.
The range is cdn$ 35 to 90, quite a spread but then again we have only an estimate and we have 2 approaches. |
