Intrinsically speaking they’re worth nothing as the business doesn’t actual create revenue at the moment. So it’s all about the value you put on the discoveries they’ve made so far. Really simple calculation to give you a rough idea.
- Times the discovery size in ounces by the current gold price (-$1000 dollars per unit to get it out of the ground, so you’re left with profit only.).
- Reduce it by your desired factor of safety (10-30%).
- Reduce it by the percentage of mine owned (which will work out around 25% in GGP’s case)
- Then divide that by shares issued. Whatever value you get to then is the fair price when everything is up and working.
- Factor an additional safety in for development of the mine, additional debt and some further dilution.
Incredibly roughly speaking you’ll be somewhere near a discovery price.