Thursday, November 15, 2012 2:02:56 PM
I will definitely explain why I say $5.7 Billion+ in the title of this post, but there are some things that must be first understood. With SRGE being in advanced discussions with two major NYSE listed metal producers for its Cinco Minas property located in Jalisco Mexico, this is absolutely huge in my opinion which leads me to think that there is probably some kind of a bidding war going on from behind the scenes for the Cinco Minas owned by SRGE.
So far, SRGE has been keeping their word about much which leads me to believe that they will keep their word on letting us know when the Southridge board of directors will approve or complete a transaction with one of the two major NYSE listed metal producers.
Let's talk about this over $5.7 Billion valuation for a minute of this deal in the works between two major NYSE listed metal producers. The valuation is going to be determined based on the value for the gold and silver that the company stated in this recent Nov 13, 2012 PR below...
http://ih.advfn.com/p.php?pid=nmona&article=55016708#
It’s also important to note that the company announced something very similar in a previously Sep 5, 2012 released PR having the same numbers above and that the numbers were confirmed from a Behre Dolbear Report as indicated below (also, the Behre Dolbear confirmation can be found in their 3rd Qtr filings):
http://ih.advfn.com/p.php?pid=nmona&article=54054364
Before we move forward to assess this over $5.7 Billion fundamental valuation of the Cinco Minas property owned by SRGE, let’s make sure we all understand the significance of the Behre Dolbear Report and its related significances. First read the post below to understand the credibility of Behre Dolbear and why the Behre Dolbear Report that confirmed high grades of gold and silver resources at Cinco Minas property is not to be disputed:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=79729247
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=79729593
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=79547036
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=81010416
It was Tumi Resources that hired Behre Dolbear to do an analysis of Cinco Minas. It is stated and indicated here within the same SRGE 3rd Qtr filing at the top of page 21 within the link below:
http://www.otcmarkets.com/financialReportViewer?symbol=SRGE&id=93307
The filing above also stated that John Nebocat, P.Geo (Professional Geoscientist/Geologist), produced three detailed technical briefs as the qualified person for Tumi Resources. John’s qualifications can be read from the Form 6-K filed with the SEC below:
http://msnmoney.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=5980435&SessionID=OAZGH8s8Yxxq2m9
This adds further credibility for the Cinco Minas property owned by SRGE. Here’s one of those technical briefs (a NI 43-101) from John Nebocat below of which the company is referring:
http://www.southridgeminerals.com/SouthridgePDF/Cinco-Minas-43-101.pdf
In short, Tumi Resources had written-off and abandoned the Cinco Minas project in 2005 as indicated below:
http://www.sec.gov/Archives/edgar/data/1191832/000114066105000212/tm0527.txt
Because of the given resource numbers being too low of interest for Tumi Resources because of how low the price of gold was back then 2005 which was $444.74 per ounce versus $1700.00+ per ounce as of today as indicated below:
http://www.nma.org/pdf/gold/his_gold_prices.pdf
This made the Cinco Minas property unattractive for Tumi Resources in 2005, but very attractive for SRGE to acquire to take the risk that the price of gold would rise of which it did. There were a few owners of the Cinco Minas (and Gran Cabrera) since 2003, but due to gross negligence, lack of funding, lack of interest, and/or a host of other reasons by prior owners of the Cinco Minas and Gran Cabrera, SRGE was able to buy the Cinco Minas and Gran Cabrera in 2010 for $7.5 Million as indicated within the PR below:
http://ih.advfn.com/p.php?pid=nmona&article=45610151
There were key entities and individuals from the Minera San Jorge S.A. de C.V. (MSJ) that allowed the purchase to take place. The most important of those individuals was Alfonso Sanchez Navarro of which whom is now a Board of Director for Southridge (SRGE) right now as indicated below:
https://nvsos.gov/SOSEntitySearch/CorpDetails.aspx?lx8nvq=aAcyYO1iIpfDt%252bkO7ehU8Q%253d%253d&nt7=0
Let’s now move forward to assess the $5.7Billion+ fundamental valuation to confirm just how much the Cinco Minas property owned by SRGE is truly worth.
Gold and Silver Amounts from 20% of Confirmed Resources from the PR:
Gold = 235,000 oz
Silver = 23,300,000 oz
Gold = $1,700.00+ per ounce as of 11/15/2012
http://www.kitco.com/charts/livegold.html
Gold Revenues from 20% of Confirmed Resources = $1,700.00 oz x 235,000 oz of gold
Gold Revenues from 20% of Confirmed Resources = $399,500,000
Silver = $32.00+ per ounce as of 11/15/2012
http://www.kitco.com/charts/livesilver.html
Silver Revenues from 20% of Confirmed Resources = $32.00 oz x 23,300,000 oz of silver
Silver Revenues from 20% of Confirmed Resources = $745,600,000
Total Gold and Silver Revenues from 20% of Confirmed Resources of Cinco Minas:
Total Gold & Silver Revenues = $399,500,000 Gold Revenues + $745,600,000 Silver Revenues
Total Gold & Silver Revenues = $1,145,100,000
Now let’s determine the remaining total gold and silver valuation from the remaining 80% of Confirmed Resources. Let’s put this in question format then solve for X to determine the remaining 80% of the Confirmed Resources.
Question: $399,500,000 in Gold Revenues is 20% of what?
$399,500,000/X = 20/100
20X = 399,500,000 x 100
20X = 39,950,000,000
X = 39,950,000,000 ÷ 20
X = $1,997,500,000
So, $1,997,500,000 is 100% of the total valuation in Gold Revenues as further elaborated below:
20% in Gold Reserves = $399,500,000
80% in Gold Reserves = $1,598,000,000
Total 100% in Gold Reserves = $1,997,500,000
Question: $745,600,000 in Silver Revenues is 20% of what?
$745,600,000/X = 20/100
20X = $745,600,000 x 100
20X = 74,560,000,000
X = 74,560,000,000 ÷ 20
X = $3,728,000,000
So, $3,728,000,000 is 100% of the total valuation in Silver Revenues as further elaborated below:
20% in Silver Reserves = $745,600,000
80% in Silver Reserves = $2,982,400,000
Total 100% in Silver Reserves = $3,728,000,000
Total 100% in Gold Reserves = $1,997,500,000
Total 100% in Silver Reserves = $3,728,000,000
Total 100% in Gold & Silver Reserves = $5,725,500,000
The total SRGE Outstanding Shares (OS) of which a valuation will be assessed against is 545,874,868 shares as confirmed from variety of sources to include PRs, the company’s website, OTC Markets update, etc. As for an exact amount of what the worth will be to SRGE shareholders, there are a few different ways to derive such of which all of them bode very well for SRGE shareholders. I think I will let each individual figure out what they should believe based on the total 100% in gold & silver reserves equating to $5,725,500,000 for the Cinco Minas property owned by SRGE.
v/r
Sterling
Sterling's Trading & Investing Strategies:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=39092516
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