Goldstone Resources Ltd (LON:GRL) announced its maiden JORC at Homase last week (click here to view) and Mining Maven gave Exploration Director Hendrik Schloemann the opportunity to expand on the news with a brief Q&A session for investors (click here to view).
The exploration update confirmed a JORC compliant resource totalling 282,608 ounces, though judging from the initial market response this may have been less than some had hoped for. Perhaps, as often happens with speculation in the run up to significant news, the market may have got ahead of itself, and that old adage, "buy on rumour, sell on fact" came in to play. The share price has since recovered which would suggest this was indeed merely a knee jerk reaction. However, we were rather impressed by the JORC figures. Why were we impressed?
Once again it's down to the relative value of those ounces, and the fact that a big slug of the resource - 81% - came up in the measured and indicated category – so those ounces in the ground have a significantly greater value than inferred ounces. For some reason the market currently seems fixated on quantity rather than quality, and this valuation anomaly is certainly not unique to Goldstone Resources. So coming from a value perspective - as we do – what value would we attribute to Homase? Edison's recent Gold Report, which provides global average values for Inferred, Indicated and Measured resources and extrapolating their values for the three JORC categories, ($340 per measured ounce, $159 per indicated ounce and $34 per inferred ounce) it would provide the following figures:
- Measured – 157,298 ounces @$340 = $53,481,320
- Indicated – 72,531 ounces @$159 = $11,532,429
- Inferred - 52,779 ounces @ $34 = $1,794,486
Total - $66,808,235
This is a rather crude metric and is used merely to attribute some sort of value on the JORC ounces at Homase. It should also be noted that Goldstone Resources is currently still earning in to the project and subject to successful fulfilment of all the stages in the JV agreement (click here to view) they will eventually achieve an 85% interest. That said, based on: the hugely significant JORC; the ability to increase the JORC resource;- the prospectivity of the region; - the fact that Homase was previously mined by Anglogold Ashanti and;- that Goldstone has itself confirmed negotiations with…
