RE: Value RGX
Your analysis will be good if grade or IRR do not matter.
As GORO president used to say, not all oz are created equal. A oz of gold with a cost of $1000 (profit of $300) will be worth less than an oz of gold with cost of $300 (profit of $1000).
RGX IRR is triple digit, so it should command very high premium.
In June 2009 RGX presentation, it already said 154% IRR! That was before the qualifying transaction, but, La Blache technically has not been sold to RGX yet, but RGX already showed IRR 154% (pages 17 and 19).
Say a company with 30% IRR and compare it with another with 154% IRR, which one do you like to invest?
In the company with 30%, you need to wait for at last 3 years to get your money back, and then each year, they return 30% to you. If you put $10K in the company with IRR 30%, you wait for 3 years to get your original money back, and then each year you get $3K in return for the next 17 years (20-3= 17).
In the company with 154% IRR, you get your money back in 6 months, and then continue to pay you money at 155% rate annually! Say, you put in $10K, you get $15K back in the first year, net of $5K. But starting next year, you get another $15K for the next 19 (20-1= 19) years!
You take a pick, but I pick RGX as it has triple digit IRR.
Go and figure KRO has 80% cost for its TiO2, but commands a PE of 20. RGX will have a cost maybe 25%, what kinds of multiple should the market assign to RGX? 60 maybe?