That is not conservative at all. In what world do you live that mining an ounce of gold (or anything for that matter) has no production costs whatsoever? Where in the history of mankind has a mine been valued in such a manner?
At best you can divide the total estimated profit per ounce by the total a/s plus a bit of dilution added for good measure.
Right now lode still loses money on every ounce. So taking $0 divided by 162M = 0.
"Hey I have a deposit worth four billion and it will only take slightly more than that to extract so please give me four billion."
Good look selling that.
With higher gold prices and lower inputs they might begin to eek out a small operational profit.
3,200,000 x $100 = 320 000 000 or under $2/share
But they can only mine 40k or so which is only $4M a year profit that will be obliterated by the rest of the development and overhead.
The UG looks promising but so did the open pit. Even if they do mine the UG at a profit it will still be a long time until all the money spent to get there is paid off.
Lode's current value estimate/opinion:
potential- nebulous, opinion, no value.
net income x10- none
Real estate- ~50M
small % of their highest grade ore that can be produced at a profit-10-20M
plant and equipment- ~40M
claims- 5-10M
Captial raised and spent- ~100M+
Market cap:80M
Lode very well may be undervalued, but not for the reasons you mention. Lode has been on the cusp of turning around for what seems like ages. When/if it does the price will rise significantly to reflect eps and the growing capacity for more of same. This is probably a low risk, high reward entry but hyping the gross value of a deposit is pointless unless it represents significant margin and lode has demonstrated the opposite thus far.
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