Running Fox Resource Corp V.RUN.H

RE: Thoughts on share price

[demaule]

You make some good points banman. On reflection I probably gave too little spec value to the Brett property. If they ever get around to proving up some numbers and the price of gold stays strong it could be a whale. I don't think I will be dumping the RUN shares in the short term regardless of the price. Based on your input I am upping my estimate for mineral-RUN to a dime. How did I come up with a share price of 5 cents for RUN? Simple mathematics is all. I am not a geologist or a mining engineer. All I know is what I read on the Internet and the picture for RUN is far from clear. After reading what I can find all I can do is speculate and so here is my speculation. Alaskan Gobi - Pogo area When Teck-Cominco decided to build a mine at Pogo a number of microcap explorers took claims around the perimeter. The claims that Running Fox acquired in the area are probably part of those. It appears RUN paid 550k RUN shares so the value of the investment might be in the range of $250k. At the time AngloGold (now AngloGold Ashanti) had an option to acquire 60% of one chunk but I think they may have passed after a brief exploration program. In any event there is no mention of Alaskan exploration interests on the AngloGold website. Now that the T-C mine is operational, I suppose there is still potential for the claims. If AngloGold did survey the property and decided not to continue that is very negative but it is possible that T-C could determine some continuity in the ore body and so they may want to take up surrounding claims. Maybe we can recover some of the investment that way. Anyhow, there has been no update out of RUN for a year and a half so I assume the property is sitting idle waiting for somebody to make an offer. Brett property RUN's 50% interest was earned by spending $500k on exploration in 2004. The report came out at the start of 2005 recommending further exploration amounting to about $1.5 million and since then it appears nothing has been done on the property. Over the years it seems about $5 million has been spent by various parties on the property but at this point I would think most of that value has faded away. Since the property has been sitting idle for 2 years I would hesitate to assign more value than RUN has actually expended, and it could be somewhat less than that. Other mineral interests? I read somewhere that there was a uranium exploration property that RUN has an interest in but it was just a single line and now I can't find it. Other than that there are supposed to be some unspecified "new mineral projects" that have been on hold due to the current energy focus of RUN. When you add it all up it still seems like somewhat less than $1 million in mineral asset value, all of which have been idle for a couple of years. The best prospect appears to be Brett and that is a hole that has gobbled up 5 million bucks and is hungry for millions more. So, if all the oil & gas interests are spun off to a new company, that leaves 30 million RUN shares holding maybe $1 million of mineral assets. The revolving credit line must be related to the oil and gas since that is where the income is. Working capital is needed to advance the continuing oil and gas exploration in the new company and so I can't imagine any of that would be left with RUN. I arrive at residual value of a nickel a share for RUN by calculating net asset value at 3.3 cents a share and grossing up by 50% for spec value. Now you have a company with no earnings, no working capital, and a small group of interesting exploration properties. The only way to move forward is to attract capital which means dilution...perhaps on a massive scale. Of course, things could change quickly. The partner at Brett could step up with some exploration plans, maybe another JV partner with deeper pockets could come on board, Teck-Cominco could buy up our Pogo claims, etc, etc. Bottom line is I didn't buy RUN for the minerals, I bought it for the gas.