Core Gold DMMIF

valuation vs. fruta del norte

[parapooper]

maybe I'm not getting something here but Kinross has about 11M ounces resource gold at fruta del norte (according to their website, please correct me if there is better info) and they plan to invest $1.1 billion in Ecuador (never mind they already paid more than that for Aurelian). That's $100 per ounce. Since Kinross has many other options to spend their money I think it's safe to assume they are expecting that the project is throwing off at least twice in NPV what they put in. So to throw that kind of money around Kinross must be quite convinced an ounce of gold in a high-grade underground mine in Ecuaduor once that mine is built is worth at least $200 NPV - after all taxes, royalties or whatever the government may throw at them.

But the same ounce of gold in a high-grade underground mine in Ecuador that is already producing if owned by DMM instead of Kinross is apparently worth $16. This does of course lead to the following questions:
a) WTF?
b) Is Kinross going to make 12x more money off their gold?

I think not.

advantages Kinross:
- larger resource -> economy of scale, higher yearly production
- more of resource in reserves (but at the grades DMM I don't see that as a huge issue)

advantages DMM:
- higher grade
- already in production
- more exploration upside

about even:
- Kinross as powerful company may get better tax-deal, or DMM as "local" company and first producer may get better tax deal  - tough call
- Kinross is a large, well-known corporation -> no scam
DMM has done about everything correctly that was in their power - is in production, did not dilute despite having every excuse in the book to do so -> also  no scam

The main problem with DMM I can see is that their IR is beyond shitty. On the other hand, they have no need for financing, therefore running around telling everybody how hugely profitable they will be while they are negotiating tax-rates has not upside for long-term investors but plenty of downside.

I would really appreciate if anyone who sees flaws with my reasoning/numbers could reply to this post
Thanks