Exeter’s 33.7m gold ounces-equivalent in perspective
Monday Exeter Resources declared an upgraded resource for its Caspiche property in Chile, running out at 19.6m ounces of gold, 137m ounces of silver, and 4.84bn pounds of copper. If the silver and copper are valued fairly conservatively, at US$12/oz silver and US$2/lb copper, Caspiche holds "gold equivalent ounces" of 33.7m, ranking it as significant by any standard.The market valuation of these gold ounces, whether actual or equivalent, gives some idea of how tricky it can be for investors to maneuver in and around listed gold stocks, which are found in the hundreds around the world. The Caspiche Project (close to being fully optioned by Exeter from Anglo American Chile Limitada), has a brilliant address.The gold-copper porphyry system lies 15 kilometers south of Kinross’s Maricunga (formerly known as Refugio) gold mine (+8m ounces of gold), and 10 kilometers north of Cerro Casale, jointly owned by Kinross and Barrick. Gold reserves at Cerro Casale stand at around 24m ounces, plus more than 5bn pounds of copper. Andina Minerals’s new Volcan gold deposit, 35 kilometers north northeast of Caspiche, has seen 10m ounces of gold outlined.Despite all the indications that Exeter’s Caspiche, a relatively low grade ore system, was set for an upgrade, investors have seen fit to value Caspiche’s gold ounces are a very modest US$13.84/oz. Caspiche is a long, long way from production, and will cost billions of dollars to build, a prospect that’s out of the money for Exeter, given its modest market value of US$271m. Exeter needs lots of luck, a partner, or help, and possibly all three, and then some.Sadly, there are no "standards" for per ounce of gold valuations. A selection of 10 of the world’s gold majors shows up an aggregate resource of 1.1bn ounces of gold-in-the-ground, ranging from 234m for South Africa-based Gold Fields to the far lighter 35m ounces held by Yamana. This year, these 10 gold diggers are likely to produce around an aggregate 31m ounces of gold, ranging from Barrick‘s 7.4m ounces to just over 1m ounces for Yamana.