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Additional Information
Market: AIM
Sector: General Mining - Gold
EPIC: OVG
Latest Price: 16.88p  (0,00%)
52-week High: 34.00p
52-week Low: 16.63p
Market Cap: 14.75M
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Ovoca Gold
www.ovocagold.com

Ovoca Gold Plc is a Moscow-based gold exploration and mine development company with a strong balance sheet and an exciting portfolio of gold properties in the Magadan region, Russia. 

The Company has a successful track record of developing precious metals assets and bringing value to shareholders. At the beginning of 2009 Ovoca Gold sold its flagship asset, the Goltsovoye silver deposit, for $47.7mn, a near 200% premium to the Company’s market capitalization at the time of sale closing. The entire asset development cycle Ovoca completed on Goltsovoye, from exploration to feasibility study to financing and start of mine construction.

Full Ovoca Gold profile here
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Ovoca Gold: Resource base value is unrecognised, says Fairfax

5th Sep 2011, 3:46 pm by Giles Gwinnett Ovoca's two main projects in the Magadan region of Russia are Stakhanovsky and Rassoshinskaya, which together contain 1 million ounces

The market has given no value to the 1 million ounce resource base of Russia-focused Ovoca Gold (LON:OVG), according to house broker Fairfax.

In a note, the broker recommends a "buy" for the company's shares targeting a price of 65 pence (current price: 29.75 pence).

Ovoca's two main projects in the Magadan region of Russia are Stakhanovsky and Rassoshinskaya, which together contain 1 million ounces.

Analyst John Meyer highlights three key issues about the company.

One is the management team's track record for realising assets in Russia. Another is that the firm's two main projects are located in the Magadan region - which is one of the six regions in Russia which accounts for 66 percent of gold production.

He added that the current valuation for the company, which works out at $14 per ounce, is at a significant discount to other miners.

"The current valuation reflects a combination of the cash in the company and the book value of the exploration licences," he said.

"We view the market is assigned no value to the resource base at its two main projects Stakhanovsky and Rassoshinskaya which contain a combined resource base of 1 million ounces."

Running through Fairfax's own valuation of 65 pence per share, it puts cash at $11.1 million, assets available for sale $43 million, total gold resource of 1 million ounces with a discounted value at $50 million making a total of $104 million, or £65 million.

The note also highlighted that previously Ovoca acquired, developed and sold the Goltsovoye silver project located in the Magadan region to JSC Polymetal for a cash and share consideration worth $47.7 million in 2009.

The management team have been involved directly in a number of successful projects in the Magadan region, it added.

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