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The Gold Stock Strategist analyzes leading junior gold producers and major gold mining companies.

Comments are welcomed!

Wednesday, March 26, 2008

Gold-Ore

CURRENT PRICE: $0.72
TARGET PRICE RANGE: $3.27 to $6.57

Gold-Ore Resources Inc. is a Canadian-based mining and exploration company with one operating gold mine and additional exploration properties, all in Sweden. Gold-Ore owns a portfolio of positive cash-flowing mines and growth oriented exploration properties.

On December 31, 2007 Gold-Ore completed the acquisition of their flag-ship property -- the Bjorkdal Gold Mine located in Vasterbotton County, Sweden. During 2007 the Bjorkdal mine produced 19,200 ounces of gold and is projected to produce 36,000 oz. of gold in 2008.

Historically, Bjorkdal has produced over 900,000 ounces of gold and, given the size of the mineralized system, Gold-Ore believes the mine will continue to produce gold for many years to come.

Gold-Ore is exploring and developing new resources, near the open pit and also at other high-quality targets on their properties.

Gold-Ore is a publicly traded company on the TSX Venture Exchange trading under the symbol GOZ. The Company’s shares also trade on the U.S. Over-the-Counter (OTC) market under the symbol GREXF.

GOLD-ORE SUMMARY

TSX: GOZ

OTC: GREXF

Shares Outstanding: 75.3 Million (81.9 million fully diluted)

Market Capitalization: ~$54 million

Telephone: 604-687-8884

Gold-Ore has recently initiated a feasibility study, tracking four gold mineralization veins.

Gold-Ore is probably one of the most undervalued junior gold miners in the universe of emerging gold producers. Sweden is a mining friendly country. I don't expect Gold-Ore to stay at this price level much longer and intend to add shares if it stays this low.

Gold-Ore Web Site

Presentation:

Production for Gold-Ore is projected to be 36,000 oz. in 2008; 60,000 oz. in 2009; 70,000 oz. in 2010. In 2007, production totaled 19,500 oz. gold.

Gold-Ore production is not hedged.

Gold-Ore has no long-term debt.

Cash currently available as of September 2007 = ~$5 million,

The following methods are what I use to value Gold-Ore Resources Ltd. for my investment purposes and provide a range of short-run and potential long-run value.

SHORT-RUN CASH FLOW SHARE VALUE

$3.27 per share in 2009 (2009 reflects Gold-Ores’s full production profile relative to 2008) using a cash flow model valuation and assuming the following:

10x cash flow
$1,000 per oz. price of gold
$450 per ounce production cost
60,000 ounces of production in 2009 (~36,000 oz. projected in 2008)
$1.5 million G&A
$5 million capital expenditures
81,900,000 shares outstanding (fully diluted)

POTENTIAL LONG-RUN RESERVE SHARE VALUE

$6.57 per share based on current and projected resource base.. The majors are paying about $280 an ounce for buyouts at $950 an ounce POG. Gold-Ore currently has about .9 million ounces (M&I&I) and if they can prove up another 1.0 million that equals 1.9 million. 1.9 million times $280 an ounce equals $5.32 million. $532 million divided by 81.0 million shares equals $6.57 per share.

DIRECTORS AND OFFICERS

Glen D. Dickson, Chairman of the Board, Director
Robert S. Wasylyshyn, President, Director
Maricruz Alvarado, Chief Financial Officer
Alvin W. Jackson, Director
Ron A. Ewing, Director
Donald A. Sawyer, Director
David F. Mullen, Director
-------------------------------------------------------------

Full disclosure: I own shares in Gold-Ore Corp.. The information provided in this post is believed to be correct, but not guaranteed. Investing in junior gold miners entails risks. Readers are responsible for their investment decisions. Do your own due diligence.

No comments:

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