1147% Potential for inner Pillar only? A "fair" valuation example for Tocvan shareholders in the event of a takeover offer:
• The realistic minimum target of an initial resource estimate at Pilar is estimated at 500,000 ounces of gold, which would generate revenue of $1.2 billion USD at the current gold price of $2400/ounce.
• In the exploration and mining development industry, however, a price of $100 is used as a valuation basis for the valuation (e.g. for the purpose of company takeover or a project purchase) of non-producing gold deposits.
• With a resource estimate of a total of 500,000 ounces of gold and an industry-standard value of $100/ounce, this results in $50 million USD or around $70 million CAD.
• 1/3 of the $70 million CAD is now usually deducted as costs (pre-capital and production costs), resulting in a valuation basis of around CAD $47 million.
• Now comes the so-called Multiplier method ("valuation multiple") is used, which is 10 in the gold industry and thus results in $470 million CAD.
• Since Tocvan currently has around 65 million shares, the $470 million shares are now divided by 65 million shares to find out what the "fair" price for a Tocvan share is. The result: $7.23 CAD per Tocvan share based solely on the valuation of the Pilar project with a resource of 500,000 ounces of gold in the event of a company takeover or a project purchase by a large gold producer.