Re: RAU - Republic Gold-Valuation
Issued shares 431,000,000 (and 151,000,000 oppies ex @ 2.5 in late 2008) trading at 3 cents for an undiluted valuation of A$12,930,000.
Operations run from reg'd office located in Mareeba which sits in the midst of most of current leases and operations. Palmer River goldfield is nearby. Most of the current interest IMHO stems from the fact that RAU has ramped up its Tungsten exploration program in this district. It has a number of large tenements that surround the Vital Metals Tunsten Mine (under development and valued at $75,000,000).
Several months ago RAU announced that they had identified an anomalous structure called anomaly B which RAU claimed about the same size as Vital Metals anomaly but with higher grades indicated from surface sampling. At that time RAU completed a nightime reconnaisance to identify the extent of the surface expression of the tungsten ore zone (scheelite/tungsten glows under ultra violet light). From these various exploration efforts RAU identified a target length of 2,000 meters x 1,000m (several months ago) and since then that length has substantially expanded to now include approximately 4,000 m x 1,100m AND three other new zones one of which has both molybdenum and scheelite over 400 meters. The interesting point here is that the target zones and their numbers get bigger and bigger and the potential richness has increased with the discovery of moly in one of the zones.
Then throw in the fact that RAU now has an option over the old Mt Carbine Tungsten Mine which is a fully developed mine with declines into 7,000,000 tonnes (non jorc subject to verification)) of ore containing tungsten. On surface they have 670,000 tonnes of open pittable ore ready for production along with over 1,000,000 tonnes of tailings containing tungsten. The mine produced 13.5 million tonnes for 2,000,000 MTU's of tungsten.
One MTU is currently worth US$250 / A$287. Drawing a long bow we might still have at least 1,136,300 MTU's = A$326,000,000 plus exploration potential. Assume the mine produces 1,000,000 - 1,500,000 tpa = 148,150 - 222,225 MTU's pa = A$42,500,000 - 63,750,000 pa. There is also a rock crushing business operating from Mt Carbine that comes with the deal and it is anticipated to cover current office and management costs. This also provides valuable infrastucture of trucks and some crushing equipment that can serve as the starting point for much larger mining and milling operations in the area for both gold and tungsten.
There is upside for exploration success plus production from Mt carbine which values RAU at 2 x Vital Metals $75,000,000 longer term BUT short term say 1/3 of this valuation = A$50,000,000 or 11.6 cents per share.
RAU gold assets are substantial. They have a number of resources around Mareeba and nearby Palmer River that are quoted at around 500,000 ounces of measured, indicated and inferred resources of around 2 g/t most of which is near surface and open pittable and will be drilled shortly to increase tonnage and measured grade and resource. Say we value this resource at A$20 oz x 500,000 with potential of 750,000 ozs = $10,000,000 - 15,000,000 or 2.3 - 3.45 cents per share.
U assets and other leases not valued at this time which may include recovery of funds from Luzon.
Cash is about $3,500,000
Valuation is 13.9 - 15.05 cents per share.
Current price is 3 cents. Upside potential on shares is 465 - 501%. Potential on oppies (from 1.7 cents and 1.3 cent premium) is 741 - 808%.
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