ATG about to explodeA worthwhile stock, but always do your own dd:
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Share Value per Attributable Resource:
The Atlanta property has a substantial existing NI 43-101 resources comprised of an Indicated
resource of 0.466 million and an Inferred resource of 0.290 million AuEq ounces. For valuation
purposes, we are taking 10% of in situ value equivalent for indicated and 5% for Inferred
resources. Typically, the industry standard for “in situ” value for gold is in the $50 to $150 per
ounce range, given that there are many challenges in converting the rock into payable metal.
Based on the grade and the shallow depth of these resources, we have assumed an “in situ”
value of $130 per ounce of gold for the Indicated resource and $65 per ounce for the Inferred
resource.
Applying this valuation to the resources available on the property, our calculation shows that the
Atlanta property will provide a value of
.62 per share to investors. The details of these
calculations are given below:
Peer Group comparison
In this method of valuation, we evaluate the market capitalization and NI 43-101 compliant gold
and gold equivalent resources of companies that are similar to Atlanta Gold from the perspective
of (1) commodity type explored, (2) location of properties, (3) mineralization of properties, and (4)
degree of exploration / fieldwork completed. Having NI 43-101 resource estimate is an important
step forward for junior exploration companies.
We therefore compared the NI 43-101 resources of Atlanta Gold with that for Midway Gold Corp
(MDW:TSX-VEN), US Gold (USX:TSX-VEN), Fronteer Development (XCL:TSX-VEN), Klondex
Mines (KDX:TSX-VEN) and Romarco Minerals (R-TSX-VEN). Some of these companies have
advanced stage exploration gold properties located in the U.S.We find that Atlanta Gold, in spite
of having sizable NI 43-101 compliant resources, is currently trading at a substantial discount to
all the companies in the peer group.
We calculate the ratio of market capitalization to gold equivalent ounces for all the above
companies in the Atlanta average market capitalization/ gold equivalent ounces for Gold peer
group. We calculate the same ratio for Atlanta Gold as well. We then find the market cap in
relation to total NI 43-101 compliant resource estimate for all companies in the peer group
including Atlanta Gold, which gives us $149.14 as the average market cap per ounce of NI 43-
101 compliant gold resource. We multiply the average market cap/Au (oz) by the NI-43-101
compliant resources for ATG, which is 0.76 million Au (oz) and divide this by the fully diluted
number of shares of ATG, which is 190.8 million. We thus arrive at the value of
.57 per share
based on the Peer Group Comparison Method.
Finally, taking an average of both the methodologies,
we believe the CURRENT FAIR VALUE of
ATG is
.61 per share (i.e., average of
.62 from Share Value of Attributable Resource and
.60 from Peer Comparison).
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Atlanta Gold Inc. (ATG) NI 43-101 Metal Value Report
https://www.goldminerpulse.com/c/atg.php
GoldMinerPulse Metrics Summary
This report is based on
NI 43-101 resource and reserve disclosures and fully diluted share counts available on
2011-08-01.
The GoldMinerPulse metrics, presented below in table format, are based on all projects and all in situ metals and are updated daily with closing market prices.
Atlanta Gold Inc. Metric Summary
General Metric
Value on 2011-08-04
In Situ Metal Value per Share (MVpSh)
US$7.88
Average Ore Value per Tonne
US$216.15
Metal Value Leverage (MVL)
96.46
Market Capitalization as a Percentage of Metal Value
1.0%
Recent Closing Stock Price
C
.08
[note 1]
Fully Diluted Share Count
214.32 M
[note 2]
Percentage In Situ Proven + Probable Reserve
0%
Percentage In Situ Measured + Indicated Resource
71%
Percentage In Situ Inferred Resource
29%
Gold Specific Metrics
Metric
Value on 2011-08-04
Gold Reserves + Resources
972.13 K oz
Average Gold Ore Grade
3.9 g/t
Market Capitalization per oz of Gold In Situ
US$18.02
( C$17.64 )
Gold Equivalent Ounces Estimate
1.02 M oz
Market Capitalization per oz of Gold Equivalent
US$17.10
( C$16.74 )
Note 1: Conversion rate used: 1 Cnd$ = 1.02155 US$
Note 2: Fully diluted share count estimated based on the March 31, 2011 financial statement plus the July 29, 2011 private placement.
GoldMinerPulse Most Optimistic Resource Estimate Summary (MORE)
All metal counts in this section are based on the combined Proven + Probable reserves plus the Measured + Indicated and Inferred resources.
Metal Summary Based on Closing Prices on 2011-08-04
Metric / Metal
Gold
Silver
Total Counts (reserves + resources)
972.13 K oz
2.23 M oz
Metal Prices in US$ (from 2011-08-04)
$1,649.40 / oz
$38.64 / oz
Metal Value per Share (MVpSh)
Shown in US$. Based on fully diluted share count
$7.48
.40
Percentage of Total Metal Value
94.90%
5.10%
Metal Value Percentage Proven + Probable
0%
0%
Metal Value Percentage Measured + Indicated
71%
81%
Metal Value Percentage Inferred
29%
19%
The above metal value totals derive from the following projects.
Project/Deposit/Mine Summary Based on Closing Prices on 2011-08-04
Project
Location
Metal Value per
share (% total)
Average
Ore Value
US$/t
Gold
Silver
PP%
MI%
I%
Atlanta Gold
Idaho, USA
$7.88 ( 100.0% )
US$216.15
972.13 K oz
2.23 M oz
0
71%
29%
Brodeur Diamond
Quebec, Canada
.00 ( 0.0% )
0
0
0
Abitibi Gold
Quebec, Canada
.00 ( 0.0% )
0
0
0
PP%: percentage of metal value from Proven + Probable reserves
MI%: percentage of metal value from Measured + Indicated resources
I%: percentage of metal value from Inferred resources
Note: percentages may no add to 100% due to rounding errors
Abitibi Gold
Atlanta Gold holds a 2% royalty interest in the Niogold Malaric deposit. The company also 100% interest in 13 mining claims in the Abitibi area.
[Source: June 2010 MD&A]
Latest NI43-101 Report:
(0 pages).
Project Location: Quebec, Canada.
Atlanta Gold
The Atlanta project lies within the historic Middle Boise Mining District in an area with a history of exploration, development and production of gold and silver ore since its discovery in 1863.
[Source: NI43-101 report dated March 2009]
Latest NI43-101 Report: TECHNICAL REPORT AND UPDATED RESOURCE ESTIMATE ON THE ATLANTA GOLD PROPERTY ELMORE COUNTY, IDAHO, USA
2011-02-18 (94 pages).
Project Location: Idaho, USA.
Average Ore Value (all estimate types): US$216.15
Indicated
Metal
MVpSh
Contained Metal Quantity
Ore Grade
Ore Quantity
Gold
$5.31
689.63 K oz
3.463 g/t
6.19 M t
Silver
.32
1.80 M oz
9.051 g/t
6.19 M t
Estimate notes:
July, 2011 news release.
Cut-off: Gold cut-off grades of 0.041 opt (1.41 gpt) for open pit and 0.113 opt (2.25 gpt) for underground resources were established from metal prices, expected recoveries, and estimated operating costs.
Inferred
Metal
MVpSh
Contained Metal Quantity
Ore Grade
Ore Quantity
Gold
$2.17
282.50 K oz
5.417 g/t
1.62 M t
Silver
.08
425.54 K oz
8.160 g/t
1.62 M t