RepostI posted the post below at the beginning of the month. I think this info. helps frame the potential upside for RPM. They're not there yet, but they're moving in the right direction. Once they top up their treasury, they need more of a focus on converting the inferred resource to M&I. However, I fully understand the intent of the recently announced drill program. It's intended for maximum effect and to restore the valuation prior to returning to the market for more capital.
"I consider Rye Patch to be where Fronteer Gold was not toolong ago. Consider the following:
Fronteer Gold (after combination with AuEx Ventures and assumingNewmont's interest in Sandman ends up being 0%):
Gold Equivalent Ounces:
Measured: 129,100 oz. (2.7% of resource)
Indicated: 3,234,228 oz. (66.4%)
Inferred: 1,508,226 oz. (30.9%)
Total Au Equiv. Resource: 4,871,554 oz.
Proforma Market Cap: +1.0 billion
RPM:
Gold Equivalent Ounces:
Measured: 357,900 oz. (9.2% of resource)
Indicated: 824,880 oz. (21.1%)
Inferred: 2,727,100 oz. (69.7%)
Total Au. Equiv. Resource: 3,909,880 oz.
Market Cap: 12 million
Fronteer has other non-Nevada based projects in Labrador (uranium) and Turkey(copper/gold) that the market has assigned a high value to. In addition, it hasa 100% interest in its Northumberland project which contains 65.4% of the totalresources identified above. This compares with RPM, where Newmont has back-inrights to 70% of Wilco (72.6% of the total resources identified above). At theend of the day, Fronteer has to build mines which will result in significantdilution anyway. Look for some market comparables for their projects in Turkey and Labrador and do the math on whatvalue the market is assigning their gold equivalent resource in Nevada. You'll besurprised.
The market has punished RPM for REN and some investors are concerned withNewmont's back-in right on Wilco. But, it doesn't matter how you sliceit. You end up with a diluted interest at the end of the day if you want tobuild a mine. IMHO RPM is very undervalued at these levels. I don't care aboutUbika's valuation. Based on Fronteer's valuation, I see a lot of upside inRPM".