Mark,

Excellent discussion on deposit size and valuation.

Looking from the macro-economic point of view, I have two scenarios for PRB Borden Gold:

- Scenarios #1: Treat the LGZ open-pit zone with the UG HGZ as one deposit. Borden Gold would have something like 7-8 Moz, which is much much better than TTR Cote Lake due to the high grades at Borden. It should be noted that IMG paid ~$600M for about 7Moz @ 0.90 gpt (noting that POG in 2012 was higher than $1300/oz...but TTR used, I believe, 1200/oz in their resource estimate).

Let's just assume (conservatively) that Borden has the same resource estimate as Cote Lake hence it would fetch some $600M ($600M/75Ms = $8/s. This is rock bottom price for PRB share.

- Scenario #2: If the LGZ open-pit and the high grade UG are considered separately, then the LGZ is similar to that of Cote Lake. The 4.3 Moz for Borden Gold could be adjusted upward by considering the COG used in both cases (COG= 0.50 gpt for Borden, and 0.30 for Cote Lake, if I am not mistaken). In addition, the infrastructure for Borden Gold is much better than that for Cote Lake. Hence it can be argued that when the POG has sign of heading up the worth of this open-pit portion is in the range 500 - $600M. Take $500M to be conservative, $500M/75Ms = $6.7/s.

The HGZ (including the extension) would contain something like 3-4 Moz @2.5gpt. Which would make a profitable mine just like AEM Goldex Mine. Note that Goldex is processing a lower grade ore at the total cash cost of $782/oz (Reference: AEM/Operation/Goldex). I have not done a detailed analysis, but roughly, a 0.25Moz/yr operation would yield a nice profit, say 0.25Moz x $500/oz = $125M/yr, for 12-16 years. If the AEM Goldex model is used as an example (low Capex, UG bulk tonnage operation, and back fill the mined portion with waste rocks) then the valuation of Borden Gold UG would be in the order of several dollars.

Currently, the SP = $2.6/s, one can expect a factor of about 4x (say ~$10/s), using a realistic, but conservative, valuation for both open-pit for low grade and UG for high grade.

If the PRB has a good hit (long intercept at high grades) in East Limb, then all bets are off (Hint: The SP can only go up in this scenario, lol).

Just my speculation folks. Comments, (fine tuning if you have better numbers?), are welcome.

goldhunter