Mark

I had the same idea written up on a piece of recycled paper (one side is still blank), but wait until this morn to type it up neatly!

Here goes,

Assumptions

- Market Cap: $68M using OS: 65M shares, this is what the market is saying about the worth of PRB, $68M including EVERTHING

- Cash:$32M, this is real money stashed under the matress

- Case 1: Net worth after cash (and ignoring everything else): 68-32 = $34M

- Constrained resource: lower in-situ oz but high grade @ 3.4M ozAu (cut off 0.6gpt, more oz if cut-off were lower to 0.3 gpt for the constrained case. Even more oz if a large pit were considered, some 6Moz indicated plus inferred, but let's stick with 3.4 Moz Au

- BC: Let's say that it were sold at $34M (This is just for illustration purposes only, since I like simple math, reason given below)

- Case 2: Net worth of PRB after cash and BC: 68-32-34 = exactly ZERO

- Case 3: Net worth of PRB including everything (cash, BC, LSG JV, 5% Goldex NSR, etc):

ZERO - whatever = negative, could be a big fat negative number.

Summary of PRB worth as perceived by the market:

Case 1: $34M/3.4Moz = $10/oz

Case 2: ZERO/3.4M oz= ZERO

Case 3: negative $M/3.4Moz = still a negative number (i.e., free stuff for an acquirer)

This is just to illustrate that no matter how you slice it, the results are ridiculously low compared to the valuation of similar (upper tier) junior companies, especially those that were taken over by senior companies. The offers for some were about 10 times or more compared to $10/oz for case 1.

Not sure if it's just a coincidence but we have a similar situation for FNC. A suspicious mind may conclude that it must be a conspiracy for those with a connection with the Ring (as in RoF).

goldhunter (fearing about a hostile TO with starting with low-ball bids)