Most recent NI 43-101 filed on SEDAR.com, May 2017, shows ~ 158,000 oz gold in the M & I category.
From Casey Research (likely to get Little Mikey Monkey Survey all hot and bothered...sleepless nights ahead)
At any given time, we know the international spot price for an ounce of refined gold but what about the gold an exploration or mining company has in the ground – how do we value that? [We have the answer. Read on.]
The comments above & below are edited ([ ]) and abridged (…) excerpts from the original article by Louis James and Andrey Dashkov (www.CaseyResearch.com)
There are several different ways to value a junior miner’s gold in the ground:
1. Given sufficient data, you can estimate a reasonable net present value (NPV) for a project and deduce what each of the company’s ounces should be worth. To do this, you need to know annual output of the proposed mine, proposed capital expenditures, energy and other costs, and many more things. Unfortunately, for most deposits held by the junior companies we tend to follow, there is just not enough data available.
2. Another approach is to compare the value the market is giving a company per ounce of gold in hand against the average value the market gives companies with similar ounces. The most obvious way to define “similar” ounces in the ground is to use the three resource and two mining reserve categories defined by Canada’s National Instrument NI43-101 regulations – the industry standard. These are combine these into three broad groups:
a) Inferred:
The lowest-confidence category, based on just enough drilling to outline the mineralization.
b) Measured & Indicated (M&I):
These higher-confidence categories have been drilled enough to establish their geometry and continuity reasonably well.
c) Proven & Probable (P&P):
These are bankable mining reserves – basically Measure and Indicated resources with established value.
So, what does the market give a company, on average, for an Inferred ounce of gold? M&I? P&P? To answer this, we combed through every company listed on the Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSX-V) and pulled out the ones with 43-101-compliant gold resource estimates (or mostly gold) – no silver, copper, etc. Of these, we kept only those with resources that fall almost entirely into only one of our three broad groups: Inferred, M&I, and P&P leaving us with about 90 companies to calculate some averages on and we got these numbers:
• US$20 per ounce Inferred
• US$30 per ounce for M&I
• US$160 per ounce for P&P
Armed with this information, if you didn’t know anything else about an M&I resource (political risk, type of ore, etc.), but you saw that the company that owned it was trading at $10 per ounce, whereas its peers are valued at around $30 an ounce, you can conclude that there must either be something very wrong with the project or the stock is a great speculation. If there’s nothing wrong with the project, there’s an implied growth potential in the stock price, based on the difference between what the company is getting per ounce and the market average for similar ounces. In this case, it would be: $20 x # Ounces ÷ # shares.
As a matter of perspective, a few years ago the market was giving a company about $25 per ounce Inferred, $50 for M&I, and about $100 for P&P. Then, when gold ran up over $1,000 before the crash of 2008, these valuations went out the window, and some companies were getting over $100 for merely Inferred ounces – do we have your attention now? Conversely, just after the crash, there were companies having a hard time getting $10 for M&I. That was clearly a sign that it was time to buy, and we did, with gusto. It’s also why, when the Mania phase gets underway, we’ll be selling into it as gold approaches the top; we will not be attempting to time the top. It’s far better in this business to be a day early than a day late.
Today, the market is willing to pay more for advanced and producing stories ($160 P&P) but is discounting earlier-stage stories, hence the lower M&I valuation than in previous years ($30). These figures will change again as the market’s appetite for risk changes.
Bottom line
We often get asked what an Inferred, or M&I, or P&P ounce is worth in the ground. The $20, $30, and $160 figures are only rough guides, and you must consider the reasons why some ounces are given more or less by the market, but they’re a good starting point.
So a quick calc....158,000 * $30 = Under $5,000,000 value of "gold in the ground" as of May 2017 NI 43-101.....SIGNED OFF BY A P. ENG, P.GEO
Compared to current market capitalization......draw your own conclusions. I have & OVER VALUED is mine.
If, as a previous poster has posted....mngmnt here is "hoping" to get to 2,000,000 oz...that's only $60,000,000 worth of "gold in the ground"
If you believe Peter George's 60 - 90,000,000 oz gold....undervalued...good luck with that.....
The Association of Professional Engineers and Geoscientists of British Columbia has reached a consent order with Peter Thomas George in which he has agreed to pay a fine of $15,000 and pay $20,000 towards APEGBC’s legal costs for a disciplinary proceeding concerning a technical report that he wrote as the designated “Qualified Person” (QP) in August 2012 about Barkerville Gold Mines’ (TSXV: BGM) Cow Mountain deposit in B.C., and two technical reports he authored in 2011 for Rubicon Minerals (TSX: RMX) about the company’s F2 deposit in Ontario’s Red Lake camp.
“He’s admitted to all the charges, so we did not need to proceed to a public hearing,” Efrem Swartz, APEGBC’s director of legislation, ethics and compliance, told The Northern Minerby telephone from his office in Vancouver. “George’s license was not revoked, but he must partner with other professional geoscientists to produce mineral resource or reserve estimates.”
Swartz noted that the British Columbia Securities Commission was the complainant in the case against George and that the QP admitted that not only had he demonstrated unprofessional conduct, incompetence or negligence, but that the Barkerville report and the Rubicon reports fell below the standard expected of a reasonably prudent QP and professional geoscientist in similar circumstances.