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Valuing Mining Stocks: In Defense of Net Asset Value

Posted on May 21, 2008

While browsing the various fundamental evaluations of miningcompanies made by investors on internet message boards, I have consistentlyseen two valuation methodologies - the insitu method and the cash flow method - used frequently, while thetraditional net asset value [NAV] method used by professionals is neglected ornot used at all. The NAV method, Ibelieve, is superior to the other two, and the following is a defense of thisvaluation technique. The in situvaluation is the easiest valuation methodology to use for a mining company. Itconsists of merely adding up a company's resources and divid...

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