Glorieux,

This is a controversial topic. I have seen and raised this question with other companies regarding why they did not use the inferred in their PEAs, and the general replies were this was not allowed, or they just want to be on the conservative side, since they may not be able to defend the inferred values (and could end up facing a class-action).

I found one link here that provides some discussion on this topic and they quote the Canadian Security Admisnistrators (CSA). Part of that is pasted below.

http://www.osler.com/NewsResources/Default.aspx?id=4849

-----snip-------

"One of the key attractions of a PEA is the specific exemption for PEAs from the normal prohibition on economic analysis disclosure that includes or is based on inferred mineral resources, the weakest of the various CIM categories of mineralization. That exemption is subject to certain conditions, including the use of a prominent disclaimer and the inclusion of disclosure regarding the impact of the PEA on the results of any pre-feasiblity study (PFS) or feasibility study (FS) that exists in respect of the same project, but nonetheless provides an opportunity to provide a portrait of a project’s potential based on inferred resources. That opportunity disappears once the project advances to a PFS, which must be based solely on higher categories of mineralization. As a result, there may be a temptation to retain what is nominally a PEA in place notwithstanding the progression of the project to a more advanced stage, in order to retain the ability to provide economic analysis based on inferred resources." (underlined mine)

------snip------

RPA may choose to include the inferred in that PEA that you referred to, but they would need to include a prominent disclaimer (did they?).

There may be other examples for either ways (include with a prominent disclaimer or not include), but I would take a consevative approach not to consider the inferred in the valuation, keeping in mind of course that it's there and may be available later once they have more drill results to back it up (since the regulator will require this when they advance past the stage of the (preliminary economic analysis) PEA toward a final version.

Yes, I would take anything above $10/s (15 or 20 is just dandy), but I am not brave enough to aim too high, since the aiming too high may set one up for a hard fall (I still remember a 30% drop in the SP, just a few days ago, following the last NR).

Each person his/her own. GLTA.

goldhunter