AXG - Antipodes Gold [formerly GEL - Glass Earth]

[elZorro]

Time for a realistic look at a valuation for GEL, as there are some figures now.

Since GEL has inferred resources mostly, we have to use the lowest figures given in this article:

GEL might be undervalued by 1/2 right now, but I don't think there are 43-101 ratings for the gold in ground. Muirs is getting closer. I think the reason Newmont wants to see 5Moz at WKP is because they have only 65% of the resource. If they moved to own GEL outright and then announced they're mining WKP, the valuation of the gold at WKP would be greatly increased. Of course, they'd only need 3Moz confirmed to make it worthwhile mining over there.

Here’s How to Value a Junior Miner’s Gold in the Ground

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.]
So say Louis James and Andrey Dashkov (www.CaseyResearch.com) in further edited excerpts from the original article* which Lorimer Wilson, editor of www.munKNEE.com (It’s all about Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. The authors go on to say:

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

Resource	Potential	Percentage	GEL's	Valuation at $20/oz		Valuation at $160/oz
Name	Gold, Moz	For GEL	Moz	Conservative, C$mill		Once P&P, C$mill
WKP	3	35	1.05		$21		$168
Muirs	1	100	1		$20		$160
Garibaldi	0	90	0		$0		$0
Game Hen	0	90	0		$0		$0
Ophir	0.5	50	0.25		$5		$40
Placers	0.3	90	0.27		$5		$43
Totals	4.8		2.57		$51		$411
	Moz		Moz		C$mill		C$mill
Valuation per share (approx 68 million on issue)					$0.78		$6.23
Multi-bagger status from today's price					2		18

[Vtrader]

EWT position over on ASX gold thread
If I can count correctly now could be a good time to get some more GEL.

Z,
This gold price point could dry up your eyes, I would like POG to rise also.
You were not wawy from ST for too long, did you catch a big fish?
V.

[elZorro]

Hi Vtrader, I wish I could have turned a more colourful phrase about GEL.. but feel sure there will be some good news before the options expire, and anyway the first quarter report is due.

Regarding fishing, it was partly a working break, but I can report that of 10 people fishing a small stretch of the Waitahanui (Taupo) the other day, I was the only one who landed a trout during an hour or so. And some of those fishing looked like permanent fixtures. I have just baked some of it, mighty fine little trout (about 2.5 lb).

I will have a look at your EWT work on the gold thread. Cheers.

OK, no charts to help me out there VT, but goldbug sentiment tells us to expect a recovery in the gold price. I have kept an eye on OGC too, without investing while it travelled aimlessly sideways. It's plumbed the depths lately, and I bought a little bit today. But as P says, why would you buy when you're not sure it's stopped dropping? I'm poor at that rule.

I'm sure OGC will be looking good by the end of the year anyway. How could they muck it up this time?

GEL: we'll need to have a good look at the quarterly report, and I have to say, surely they know what happened with the rest of the WKP31 drilling by now. Either it would have a bearing on the market, and it should be notified, or it has no bearing, so will wait for the quarterly report. 14 market days until the options expire.

[troyvdh]

dear zorrow...I recently topped up on GEL buying 3000 at 35.....having bought in some years ago....not meaning to put you on the spot....and you may well have declared your status in the past...but do you hold GEL....cheers...

[elZorro]

dear zorrow...I recently topped up on GEL buying 3000 at 35.....having bought in some years ago....not meaning to put you on the spot....and you may well have declared your status in the past...but do you hold GEL....cheers...

Hi Troy, apart from a brief spell of disillusionment, I have held GEL since the IPO. I have enough stock that my eyes water and my wallet shrinks before me if the share drops.

[troyvdh]

cheers....understood and appreciated....troy....go well

[elZorro]

cheers....understood and appreciated....troy....go well

I guess that's "Go well, go GEL" . That's a tasty parcel of shares sitting at NZ35c there this morning, I hope someone's not confused over the exchange rates. GEL finished at about NZ42c on the TSX last week. The shares might not move far above NZ45c (C35c) until the options thing is settled in early June, but that is also the time GRU#1 will be adding to cashflow at Drybread. From that date on, the price should trend upwards.

I had another thought about WKP: Newmont could buy out just the waihi area JV permits from GEL, and mining would then be at a threshold of 3Moz, and they have an added sweetener in several areas of the permits. The cash would then free up GEL to mine Muirs, or move on to a lot of exploration drilling. Sort of what has happened for Ophir Gold (Bob Kilgour), but on a much bigger scale.

[elZorro]

GEL on C36c or NZ46c overnight, better volume on TSX. Seems to be more awareness about the company's prospects there, than in NZ. Maybe there will be some news in the first part of this week, but I will be away chasing trout, it's raining.

[elZorro]

A bit of contagion affecting most goldie shares, but GEL is holding up better than OGC on average, from what I can see.

Last year, GEL put out the first quarter report on 25th May, and the options are expiring on 7th June. So I'd be expecting some WKP31 data, Game Hen drilling data, any new WKP drilling, and maybe a placer update within a few days. GRU#1 should be nearly ready for transport to Drybread by now, if it's not already there.

[elZorro]

GEL doesn't usually put out news at the end of the week, so perhaps next week we'll see something.

I had a bit of a look for any new permit applications at NZPAM: nothing of note except that Goldmines NZ has applied for a 2 year extension to its large Southland permit that surrounds GEL's area down there. Of course GEL now owns all of Goldmines NZ.

http://www.nzpam.govt.nz/services-dr...12F9A7FF0B09BD