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CTO 0.8¢

charters towers gold valuation

  1. BlackGold

    7,063 posts.
    Everyone seems to be wondering why CTO has jumped recently .. so would i BUT if all what the directors have been telling us is true, then CTO should be a $1 stock!

    The problem seems to be a lack of confidence in the directors, project and gold prices.

    The directors i cannot comment on but CTO has had a very chequered past, going into receivership and out again .. not many company can do that! The company has spent quite a bit of money so far with little to show for it. Mining hard rock veins isn't cheap.

    On the positive, they apparently have(?) 15M Oz POTENTIAL, not sure if that's proven or possible? previous mining has shown there was alot of gold in the surface veins, whether these rich veins go deeper is still to be confirmed. Drilling up reserves with gold veins is very difficult.

    Also they have new machinery that is designed for cost effective mining of narrow gold veins. whether they live up to expectations is still to be tested.

    On the gold front, i suspect we might be in a period of lowering US$ and a slowly recovering gold price. But this will probably be offset by a rising A$. If you believe the gold bugs, the US economy is on the verge of collapse and gold will shoot to $1,000 Oz!

    if we take a very rough valuation of CTO, i get numbers like this;

    Say conservative 5M Oz 2P, by A$100 NPV that equals A$500M, or $1.60 per share, or 80c-$1 with a 50% discount.

    Of course proving 5-10+M Oz reserve is going to be difficult although history says it's possible. The $100 inground value is very variable as cost of extracting the gold is still be determined accurately (to my satisfaction). Hopefully the new technology will work!



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