Tyhee' share price is low compared with other gold miners...Is it really or are some of the other miners overvalued? I will try to compare Tyhee to 3 other miners and more not published here. The selection of these miners has been done based on the following criteria.


1- Mine is located in North America -including Mexico.
2- Advanced stage exploration company.
3- Pre Feasibility Study already done or close to be published

Please note that my comments should not be seen as a judgement for investing or not investing in any of the companies mentioned below. It is just my opinion.

I would like to start by saying that comparisons are very difficult Not only because I am not a mining analyst but also because the companies -except for technical reports like NI 43 - are not using a standard "fact sheet" that could give the retail's investor the opportunity to compare apples and apples.
The information available through official sites are not always up to date and so difficult to find (for example shares fully diluted or cash position...). About the outstanding/fully diluted shares, I found that Romarco for example has 376 M outsanding shares and 439 millions fully diluted. When/if they are exercised the warrants and/or options will increase market value and value/oz in the ground dramatically. However for the numbers below, I used the outstanding number not the fully diluted.

The reserves and/or resources published do not use the same criteria: Gold price for example is not the same (from $700 to $950). This is very important because if you change, for example, the price of gold in the base case, you will reduce the cut-off grade and by doing that you will affect the waste to ore (stripping ratio) ratio and also the resources evaluation (lower cut-off grade increases the resources by adding ore not economically valuable with the higher cut-off grade).

The NPV calculation is made with different criteria: Brett is using a gold price of $825/oz, Lake Shore $925 while Tyhee is using $750.

Terminology used is different: For example Romarco announced in 02/2009 the publication of a "bankable feasibilty" and in 12/2009 "Romarco Launches Feasibility At Haile". For me, this is a strange way to do it. Without the FS a bankable feasibility has no meaning except if the financing is done internally. “bankable” describes only the level of accuracy of the analysis … not necessarily the outcome.

Capital cost Contingency (not included in data below): Tyhee vs Romarco: Capital cost contingency included: 30% for Tyhee vs 7.9% only for Romarco.
All of the above to say that I am not even sure mining analysts can really do what I am trying: Comparing apples with oranges. What they do is to analyze one company and based on published information, they apply their own set of ratios.

So these are some of the criteria I have found. After reading them, ask yourself; "why a so big difference in share value?" I will tell you what I think below.

Total shares outstanding (TSX) X Recent share price = Market value / total resources = $ value per oz

Tyhee -TDC-: 220 millions X .23 = 50.6 millions/2.2 millions oz = $23/oz
Romarco -R-: 376 millions X $2.05 = 770 millions/4.1millions oz = $188/oz
Lake Shore -LSG-: 320 millions X 2.87 = 918 millions/1.47 millions oz = $624/oz
Brett Resources -BBR-: 120 millions 91 X 1.91 = 178 millions/6.8 millions oz = $ 26/oz

The second set of values is based on

NPV 5%/ base case/Gold price used/Capital Expenditure/Total cash cost per oz

Tyhee - 143 millions - $750 - 150 millions - $384
Romarco - 161 millions - $750 - 153 millions- $266
Lake Shore - 184 millions - $950 - 140 millions - $369
Brett - 588 millions - $825 - 772 millions - $382

I would say that my research of the above companies (Plus a few more not included here like Alamos Gold, Apollo Gold and Linear Gold that just announced yesterday that they are merging!!!) has shown me the following:

With the same NPV value and in many cases similar production cost, the share price varies dramatically. How do you explain these huge differences? These are my findings:

1- Tyhee is very, very conservative when announcing its research while other are hyping results. Just 2 examples:
1A- Lower contingency cost (10% instead of 30 would reduce Tyhee capital cost by about 20 millions!)
1B- Romarco expects a higher cash cost than the one used in its bankable study. I expect Tyhee's cash cost to go lower after the FS is released.

2- Not only the number of analysts covering other companies is higher (Except Brett) but the type is different. The "successful ones" like Romarco, Alamos, Lake Shore...are covered by (Canadian) banks. This increases the number of potential retail investors and has therefore a stronger influence on the SP with higher volume. Analyst Merv Burak has Tyhee's SP projected to go to the 80cts (similar to my target posted March 3). Did the SP react? NO. WHY? not enough followers or more likely subscribers who are already aware of the company and do not react anymore (including those who are saying that the low price is a good opportunity to add "cheap" shares and have been saying that for the last 3 years! I guess they don't need higher share price!). Tyhee's story has not been "advertised enough" through big investments entities (ie: banks)

3- Financial backing is very strong for almost all companies except Brett and Tyhee. Romarco for example got a 20 millions+ financing just before announcing their "bankable" study (at 38cts + 1/2 warrant!!). From this moment the SP went up to almost 2 dollars (with another large bought deal financing in 07/2009 at 88cts). Lake Shore had 2 closings for a total of 16 millions dollars in 12/2009 - 02/2010. In the meantime, Tyhee has dificulties getting a few millions for advancing its promising gold mine.It is interesting to note that Puplava and Sprott while being huge Tyhee's holders do not help in any way for new financing.

4- Many gold miners are advertising their strong cash positions OR their intention of " building a new, mid-tier gold producer" (Even if they are not producing anything yet) meaning in investors mind that they are ready to go for JV or merger... Tyhee (still very conservative and keeping a low profile) advertise itself as a company "engaged in the exploration and development of mineral properties in Canada and internationally" and "to become a leading exploration and development company". So would you put your money in the former or latter????

I am confident that Tyhee's board is going to change its message and emphasize, soon, its desire to become a strong producer. It is what I hope to see soon.

Hubert