Gowest Amalgamated Resources Ltd fka GWA

[douginil]

This might help getting things going.

On the potential value for a share. A lot (if not all) came from the concept discussed by Michael Ballanger's article in April 2010 (http://www.theaureport.com/pub/na/6054)

Below is a procedure (one of the many procedures) for estimating a $/Share value of an exploration mining stock . It is a quick & dirty one, and one that an investor "on the outside" can use. The math is pretty simple.


A = Quantity of company shares - use 113,300,000

B = Recoverable ounces estimated; Lets assume 1,200,000

C = B / A = 1,200,000 / 113,300,000 = 0.0106 ounces of Gold in the ground per Share

D = Market price per ounces that a major has in its model; Lets assume US$ 1,000 (1).

E = C x D = 0.0115 x 1,000 = Value of the Gold in the ground per share = US$ 10.60

F = Percentage of the value in the ground that a major would pay to buy out. Lets use 10% (2)

G = E x F = US$ 11.5 x 10% = $1.06 /share

(1) This is an estimated figure that the user thinks gold will average over the next 10-20 years. Using today's spot market is probably unrealistic.

(2) See MB’s article in April 2010 (http://www.theaureport.com/pub/na/6054) Percentage ranged from 10% to 40%. Using 10% essentially means that we are discounting the value in the ground by 90% to cover various risks, eg: the cost of building the mine, the variability of the selling price and the cost of extracting and processing the ore over 10-20 years, and the many other unknowns that would impact the cash flow stream over the years, and of course the inaccuracies of the other data that goes into the discounted cash flow model and the selection of the discount percentage to use.


Of course this is a mathematical process. Just remember there is no adjustment factor that can be incorporated that accommodates the market's positive reaction to a "glory Hole" or negative reaction to a couple of "dry holes" where expectations for the drilling is high.



THIS IS JUST MY OPINION, USE YOUR OWN ASSUMPTIONS ON OUNCES REPORTED, MARKET PRICE, AND PERCENTAGE THAT A MAJOR WOULD BE WILLING TO PAY.

Douginil