Explor Resources Inc. (fka EXSFF)

[Gregory_]

The market cap includes assets, if investors are paying attention, which I claim they are not, but you are right that I did not include such assets in the EXS evaluation.

That was not the intended point. I will try to better explain.

The latest interview with CD indicates that our indicated resources should be easily priced at $100-$200 an oz. He then went on to say that the inferred would be at $50-$100 oz. (He said the inferred is priced at 50% of the indicated price.) The interviewer agreed.

My point:
Either they are incorrect in the interview or the market is incorrectly pricing LSG's resources @ <$50/oz.

I will point out a few things, and you can decide who is wrong, the market or CD.

LSG PEA (on their website) -
Page 177 - Production Summary = 798,504 tonnes in 2013
Page 215 - Estimated LOM Operating Costs = $113.24 / t

798,504 tonnes in 2013 = 124,354 Au oz. (according to page 177)
$113.24 * 798,504 tonnes = $90,422,592.96 cost for 2013

$90,422,592.96 / 124,354 Au oz. = $727.14 cost per Au oz.

124,354 Au oz. * $1700 Au price = $211,401,800 revenue in 2013
$211,401,800 revenue - $90,422,592.96 operating costs = $120,979,207.04 profit in 2013

Final metric:
$1700 Au price - $727.14 cost / Au oz. = $972.86 profit per oz

$46 / oz is cheap. That is a 21x mark-down to mine the resource. Seems worth the risk, unless I am missing something about LSG.

Here are their reserves/resources:
http://www.lsgold.com/Mines-Projects-Properties/Reserves-and-Resource-Base/default.aspx

Added up, you have:
8,713,211 oz.

$280M market cap (if the market is efficient, which it is obviously not, this includes assets) + $102M debt = $382M

$382M / 8713211 oz = $43 / oz

This is potentially a dangerous metric because it is hard to say if all of their resources are accessible/mine-worthy. Some of them are lower grade (~1-2 gpt) and could cost more to extract.