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| | Corporate Profile: Linear Gold Corp
Publisher: Kaiser Research Online
Author: Copyright 2009 John A. Kaiser
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Linear Gold Corp (LRR-T)
| Linear Gold, led by President and CEO Wade Dawe, is a gold exploration and development company with projects in the Dominican Republic, Mexico, and most recently, the province of Saskatchewan in Canada. In the Dominican Republic the company has 35% carried interests in three high sulfidation epithermal gold projects optioned to Everton Resources located near the Pueblo Viejo mine being developed by Barrick and Goldcorp. In Mexico Linear's major property is Ixhuaton, located in the Chiapas region, where a June 2006 resource estimate identified 1.7 million gold ounces and 6.6 million silver ounces in all categories. Kinross subsequently acquired a 70% option by paying between $105 and $115 million, depending upon project resources, and by spending $15 million on exploration, but withdrew in December 2009. Iin May 2009 Linear acquired the Goldfields project, located near Uranium City in Saskatchewan's Athabasca Basin. Goldfields hosts a total resource of more than one million gold ounces in the reserve category between two deposits, and has an updated 2007 feasibilty study envisioning annual production of 90,000 gold ounces at $419 per ounce, with initial capital expenditures of $63 million and an NPV of $137.6 million using $850 gold prices. Advancing Goldfields towards production has become Linear's focus. In March 2010 the company announced it had agreed to be acquired by Apollo Gold Corp on the basis of 5.74 Apollo shares per Linear share, a $2.30 price per share based upon Apollo's price at the time of the announcement. |
Key to Understanding IPV Charts and Spec Value Hunter Tables
| An IPV Chart is a graphical presentation of a Spec Value Hunter table that has been constructed according to the Rational Speculation Model developed by John Kaiser. The IPV Chart allows speculators to identify which projects offer poor, fair or good speculative value in both absolute and relative terms. The speculative value depends on the project stage, the project's implied value as calculated by the company's fully diluted capitalization, stock price and net project interest, and the dream target deemed appropriate for the project. A dream target is what a project would be worth in discounted cash flow terms once in production. |
| Green background indicates the dream target judged appropriate for this play by John Kaiser - otherwise unranked. |
Poor Speculative Value -   |
Fair Speculative Value -  |
Good Speculative Value -   |
| Note: narrow arrows indicate IPV is outside the fair value channel but within 25% of the fair value limits |
| Click on the company name to view the company profile, the project name to view project details. |
| Click on the project icon if its background is shaded to get the IPV Chart for that company. |
| Goldfields |  | 100% WI | Canada | 7-Permitting & Feasibility |
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| Goldfield 43-101 Economic Study (USD except where noted otherwise) |
| FSU | Sep 25, 2009 |
| | Goldfield |
| Mining Scenario | TR | Mining Costs |
| Mining Type: | OP |
| Cost Currency: | USD |
| Processing Type: |
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| Capital Cost: | $65,700,000 |
| Operating Rate: | 5,000 tpd |
| Sustaining Cost: | $0 |
| Operating Days: | 365 |
| Operating Cost: | $16.01/t |
| Strip Rate: | 3.4 |
| BC Cash Cost per Unit: USD | $473/oz Au |
| Mine Life: | 15 years |
| BC Cash Cost Net By-Products: USD | $473/oz Au |
| LOM Tonnage: | 25,391,000 t |
| BC All-In Cost Net By-Prod: USD | $542/oz Au |
| Est Startup: |
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| Spot All-In Cost Net By-Prod: USD | $542/oz Au |
| Production Potential |
| Metal 1 | Metal 2 | Metal 3 | Metal 4 |
| Metal: | Au |
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| Grade: | 1.26 g/t |
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| Recovery: | 97.0% |
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| Annual Output: | 61,790 oz |
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| LOM Output: | 945,392 oz |
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| Base Case Price: | $850/oz |
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| Spot Price: | $1,315/oz |
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| Base Case NSR: | $28.78/t |
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| Spot NSR: | $44.52/t |
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| Base Case Valuation |
| Reported Valuation Currency: | USD |
| Pre-Tax NPV: | $137,600,000 |
| Discount Rate: | 5% |
| After-Tax NPV: |
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| Total Base Case NSR USD: | $28.78/t |
| Pre-Tax IRR: | 43% |
| Total Spot NSR USD: | $44.52/t |
| After-Tax IRR: |
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| Annual Pre-Tax Cash Flow Base Case and Net CF/FDSH USD: | $23,303,250 | $0.50 | Pre-Tax Payback: |
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| Annual Pre-Tax Cash Flow Spot and Net CF/FDSH USD: | $52,038,690 | $1.12 | After-Tax Payback: |
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| Enterprise Value CAD : | $60,149,392 | $1.29/sh | Share Price: | $1.75 |
| Note: |
| Comparative Valuations using Life of Mine Averages |
| Discount Rate: | 0% | 5% | 10% | 15% |
| Base Case Pre-Tax NPV USD: | $283,848,750 | $167,790,254 | $101,405,793 | $61,358,893 |
| Base Case Pre-Tax Net NPV/Sh USD: | $6.10 | $3.61 | $2.18 | $1.32 |
| Premium BC PT NPV over EV: | $5.09 | $2.60 | $1.17 | $0.31 |
| Spot Pre-Tax NPV USD: | $714,880,343 | $451,851,240 | $300,100,372 | $207,469,110 |
| Spot Pre-Tax Net NPV/Sh: | $15.36 | $9.71 | $6.45 | $4.46 |
| Premium Spot PT NPV over EV USD: | $14.36 | $8.70 | $5.44 | $3.45 |
| The comparative NPV calculations assume constant annual cash flow based on the life of mine average annual payable production and CapEx spent in year one. The operating cost includes the LOM sustaining capital. Due to details such as ore scheduling these NPV figures may differ from those of the 43-101 economic study. |
| After-Tax Valuations using Spot By-Product Prices |
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