GDN 0.00% 1.7¢ golden state resources limited

value if commercial

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    This post is not intended to be bullish or bearish but open a discussion on valuation of a potential commercial discovery at GDN and maybe have a bit of fun
    What we know:
    Shares fully diluted 196mil
    Cash from unissued equity $15mil
    Cash on hand ~$5mil
    Current sp lets say $1.20 for the purpose of this post

    What we estimate :
    NPV (net present value) of undeveloped 2P(proven,probable) recoverable reserves AUD3/mcf (taking into consideration US gas prices)

    NPV of undeveloped 3P(proven,probable,possible) recoverable reserves AUD2/mcf

    At 1.20sp GDN fully diluted represents a market cap of $235mil
    Less cash from options and cash on hand ($15mil + $5mil) = $215mil

    So has many BCF of 2P recoverable reserves does GDN need to find to justify $1.20 sp
    $215mil / $3/mcf = 2P 72BCF recoverable reserves

    At the 3P level
    $215mil / $2/mcf = 3P 108BCF recoverable reserves

    Other factors down the track could be farmout and/or cap raising to fund further drilling (appraisal/development and even exploration)
    Development cost should be relatively low due to closeness of pipeline

    The NPV values are my own rough guestimates based on reading various analyst reports on US gas explorer/producers. I am way open to being corrected on those assumptions.

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