Resource Capital Gold Corp GDPEF

RE:RE:RE:Lockdown: RCG DELAY

[LeftBook]

Damian,

The numbers paint a good first approximation of what it is worth today.

We know what the balance sheet says

31.3 assets
- 18.3 liabilities
- 2.2 SISP
= 10.8M shareholder equity


We have a vague idea of the structure of the bids:
1. share based merger
2. buyout with cash
3. asset sale

We have no idea how the liabilities will be settled.
1. the bidder may have deep pockets
2. the bidder may have significant taxes
3. the bidder might sell assets
4. assets might be sold

We have no idea what the outlook of the bidder is for the the gold market
1. prices lower than today
2. prices higher than today
3. status quo

We know that the Dufferin PEA is NPV of $89.2. 
The PEA states a 10 year lifetime.
We know that is based on $1250/oz and a 756c loonie

We know that the properties have some indicated and inferred ounces.
There might eventually 2 million ounces - a soft number.
The cost to determine the extra ounces will require cash.

We know that RCG completed a bulk sampling.
We have some numbers.

We know that there is about $20M of tax credits.
We suspect that they could be sold seperately for $10M.
In buyout we expect some cash value for the tax credits.
In merger we need to look for something comparable on the otherside.
In an asset sale we might only be left with tax credits.

We know the liabilities and SISP/DIP.
These values are independent of the bid or the value of the company.

Sprott Lending has priced the debt against the LIBOR rate not gold prices.

Sprott Lending does not know were the price of gold is going. No one does.


RCG has frequently used private placements to raise cash.
RCG is currently in a NOI process.
The history of open market prices and the halt price are irrelevant.

The various people who have come and gone does not change the value of the property to the bidder. 

There are other properties out there.
No one is forced to bid on the property.
There are four bids.

We have no idea what the dollar value of the bids are.
We do know that it will reflect the bidder's estimate of the value today and in the future.
The bidders value may be higher or lower than our own valuations.

The best bid wins.
It could be a premium or a discount to the asset value on the balance sheet.
Repeat. The bidders value may be higher or lower than our own valuations.

If the market's valuation is higher than your valuation then sell.