So whats the RC mine worth? I don't believe the 105 million listed as worth in their last monthly statement. They used “market value” estimates a lot.

So here is the estimate I have (low-high). Low is usually depreciation from original cost. High is usually FGs estimate or cost (which ever is lower).

CostMarket Value My Low-High Estimate

Office Building474484300,000250k-300k

Lab Building11493101.5 Mil700k- 1.1M

Mining Equipment24992872 Mil1.5M-2M

Crushing Equipment26091832M1.6M-2M

Lab equipment2429002M1.5M-2M

Office Furniture22140350k5k-50k

Software11826250k0-50k

Trucks929352400k200k-400k

Sub Total5.8M-7.9M

As for the worth of the gold, I am using an estimate of the income a working mine could produce.

Using the recent 43-101 data (which is FAR-FAR below what is still listed in FGs website):

http://reliefcanyon.com/uploads/MDA_Relief_Cyn_43-101_2010_Final__2_.pdf

113000 oz indicated and 42000 oz inferred

And Pegasus mine (same pits different name) yielded 65% to 70%.

It may be too conservative but my low estimate in gold recovery will be indicated times 65% yield

High estimate will be the total Indicated+inferred times 70% yield.

In the not so independent, independent research doc that FG published by the soon to be new board member, right before they went under…

It was listed cost per ounce from the mine was $350/oz.

The doc didn’t specifically if that includes the smelting costs, (does anyone know if that sounds right?). So if it doesn’t, this estimate will be very inaccurate from this point on. I will use those costs for the high end estimate, but use a 30% premium for the low end estimate.

Then the price of gold for the calculation I used is 1000k-1100k (low-high).

Thus the profit that could be made from the estimated gold from the pits is:

33.6M-65.1M

It was also reported in this doc that there will be an additional cost of 4.5M to mine the pits after the heaps were depleted. I don’t know how much of that cost would be equipment purchase vs labor. So with no information I am assuming half and half. So the depreciation and possible resale value of the equipment will be est 500k. So the additional cost will be 4M to move to the pits.

Other stuff? I assume the reclamation bond of 2.8M is NOT part of the RC mine that has been handed over to Platinum and will be released once the sale has commenced. If anyone knows different please let me know. So this will not be included in the value. But there will be a reclamation cost at the end of the mine’s life. I assume the 2.8M is a bond for worse case. I have no info what the clean up cost will be, but I will use 400k-500k for no other reason that it rounds my numbers off.

So the RC mine worth? 39M-73M(thus the average or middle estimate = 56.2M)

Using standard VC worth (make 3 to 5 times the original investment in 5 years). Since the mine/plan/permits are well along. I think 5 years is possible. But the middle estimate still is under the 3X minimum. So with the estimate value above, the RC mine is not worth the 20M that is owed Platinum.

But there is one wild card. Victoria Gold which owns 40% of the gold (according to the URL above) adjacent to FGs claims. Using the same 43-101 estimate, Victoria has 75.3k oz indicated and another 28k oz inferred. So, using the same cost and middle estimate, if a company that could get the rights to mine, from Victoria, with an 80% of profits being paid to Victoria, the company would have 60M value to the mine. So, if the middle estimate is correct the RC mine is worth the 20M.

To Victoria, the mine could make them 62M – 116M (middle estimate 89M) if my valuation is correct. So it is reasonable to think they may have made an offer.

So that’s my estimate. Please let me know where I could have made a better assessment.

Sorry for the long post.

-Y