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Exeter Resource Corporation Message Board

  • pm_guru_1 pm_guru_1 Mar 28, 2013 1:13 AM Flag

    What would XRA be if we get some inflation and copper is $4.50 and gold $2222?

    My guess is this will be worth more than $2 EV per oz. These juniors have been abandoned for dead, but I say XRA still has a monster resource and plenty of cash to just sit it out for a long long time. I think the producers will move first though.

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    • I agree with your viewpoint. There are precious few juniors with comparable ounces on proven reserves.
      XRA is valued at only $4/oz gold by the market. Even a ridiculous $2/ oz when accounted for their cash.
      This is insane, considering that Goldcorp paid $42/oz for a lesser deposit not long ago ... !
      Just sit tight and hold your shares - XRA is a potential ten-bagger, highly leveraged to a rising gold price.
      DO NOT SELL NOW !!

      Sentiment: Strong Buy

      • 2 Replies to fsiegerist
      • Sure they got reserves but they are very poor quality and it will cost several billion to get production going and who will come to their aid. This thing is dead and will remain so. It should not be long before it sells for less than a dollar and if gold keeps falling then I can see $.50 a share.

      • It is reasonable to make distinction, regarding XRA reserves and ounces. XRA owns two separate, for valuation purposes, ore deposits, though both have the same Caspiche name.

        First resource is gold oxide-cap; it is a smaller resource, but it is quite mineable because of proximity to surface and amenability to heap-leaching. The only issue regarding this resource is water and company is trying currently to solve it.

        Second resource is big low-grade copper-gold porphyry deposit that could be mineable under favorable conditions only (higher copper and gold price). There are no guarantees that this resource will be exploited by any company in foreseeable future.

        If XRA management decides to sell Caspiche now then it can get price higher than current market cap, let say by standard 30-40% premium, and I don’t think it would be too difficult because it means giving up resource #2 for free. If company does not sell now, then market cap can diminish and it becomes a race what happen firstly: either XRA cash holdings go to zero causing dilution and share price degradation, or market conditions improve and company sells itself for better price, e.g. with 60-70% premium to current cap. Please note that premium size and stock price dynamics can change depending on results of water exploration.

        In my opinion, 10-bagger is not realistic here in both scenarios. Caspiche porphyry is not a robust deposit. XRA can sell it either for small money or for nothing. It is good enough that they got oxide cap portion to support current valuation and promise reasonable investment return, based on current stock price, especially if water is found.

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