I have been doing calculations on a number of junior development companies and emerging producers to try to determine what the market is valuing resources at currently.

As an example, when Goldcorp bought Canplats last December (gold prices were in a similar range as today), the deal was valued at $277 million. Canplats flagship property contained 3.45 million M&I ounces, plus 60.7 million ounces silver. Using a 60/1 ratio for gold/silver, that translates in to a total M&I gold equivilent resource of 4.45 million ounces.

Dividing $277 million/ 4.45 million ounces = $62 per ounce M&I

This tells me that the market was valuing M&I ounces at this price a few months ago. Whether or not that is undervalued or will increase as the gold price increases is another question. Inferred resources are rarely valued anywhere near this level, perhaps $10/ounce, so I choose to leave them out altogether. However, to continue on with the theme of "Buyout Now Price", that is what the current market price for ounces is.

Sources for above:

http://ca.news.finance.yahoo.com/s/28012010/2/biz-finance-canplats-says-shareholders-approve-takeover-company-goldcorp.html

http://www.goldcorp.com/news/goldcorp/index.php?&content_id=758

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Valuing Kimber's flagship properties in the same way results in the following:

At Monterde, 0.71 million ounces M&I gold + 0.63 M&I gold equivilent (37.5 M silver/60) = 1.34 M&I Total.

Kimber's market cap is currently $78 million fully diluted.

$78 million / 1.34 million M&I = $58/ounce M&I

Thus, our resource is fairly valued with the market currently, compared with the recent Canplats example.

Now, our grades might be higher and therefore our cash costs lower than Canplats, which could increase the valuation per ounce. I have seen M&I selling for as much as $100 - $150, but your post with a minimum of $5.25 target would assume a market value of our M&I of $292 per ounce, which I have never seen. $12 + frankly seems unrealistic. According to John Doody, who I subscribe to, the industry average for Proven & Probable ounces (requiring a full feasibility study... which would be several years away for Kimber), is $296 per ounce.

I still remain heavily invested in this company because I think the market will revalue buyout gold prices as gold goes higher, but I just do not see how your numbers add up now.

This is meant with no disrespect, and please correct me if you see numbers that are incorrect, but I have done my DD on a number of these types of companies and this is how my numbers come out.

Best,

Hysteria