Peak Discovery Capital Ltd V.PEC

RE: RE: RE: RE: RE: RE: Issues

[MiningMonster]

SS good question,
Let me explain a little better.. 
I assume the following:
- very poor market for wildcat exploration co, I give zero value to exploration upside
- ALJ unrisked is worth approx. $2.70, I discount by 85% due to uncertainty, market conditions, and prior exploration dissapointment
So I am using very conservative estimates to arrive at my personal estimation of
.40 current fair value.
When ALJ and other results come in, people's estimates of fair value will change accordingly.  However, I have heavily discounted the potential already beyond the current analyst estimates.  In my formula, a neutral result at ALJ will increase fair value.  Similarly, anything other than complete disappointment on SPC and zero development of offshore and the fair value estimate will also increase.
So, in buying for the long-term I look at the discount to fair value as a large margin of safety rather than a potential short term gain.  If ALJ flows economically, and there is progress made in other areas, the share price could be multiples of today's.  I do not think that further disappointment will impact the shares significantly because I think that the market is already priced for major disappointment.  Hope you find it useful and good luck.