Issue link: http://resourceworld.uberflip.com/i/882975
34 www.resourceworld.com O C T O B E R / N O V E M B E R 2 0 1 7 tion trade tends to be fair value. The system's pretty good at accessing what the problems are with this deposit and what it needs as a higher price. You are ultimately at the mercy of factors such as what the metal price is going to be and what the fea- sibility worth demonstrates. Whereas, in a discovery play, you have a war between bulls and bears with volatility. There's excitement and, if the discovery has scale, you have potential for extraordinary gains. RW: Could you briefly explain what your Share Collective program is? JK: The Share Collective is an attempt to clone myself. What I like to do in my newsletter service is to look at a compa- ny's prospect and imagine: "What if they did find another Eskay Creek deposit in the Golden Triangle? What would it be worth?" I come up with a deposit and grades. I look at the costs and so on and then run the discounted cash flow model based on some sort of a mining rate scenario. You get a net present value and there is something called an uncertainly ladder used by the industry which prices a future outcome based on the uncertainty. An exploration target in the Golden Triangle that's potentially worth $2 bil- lion when the discovery has not yet been made, might be fair value at 1-1.5% of, say, $2 billion, which is a $20 to $30 mil- lion valuation. That would be a fair price and as the company starts to deliver and because of the overshoot, the stock could end up getting a much higher valuation before it is actually deserved. The Share Collective clones me because one person doing this for a company is not interesting. A lot of individuals anonymously doing this with a simplified discounted cash flow model and sharing the results in a public space is interesting. The other members can argue about the assump- tions. It enables a consensus expectation to emerge which other investors can look at and decide whether they are going to place their bets on the negative end of the spec- trum or at the positive end or somewhere in the middle of the consensus. The beauty of this is when new results come in everybody rushes back to their little models, adjusts accordingly and re-shares it. Of course, if the metal price goes up, the system auto- matically recalculates so that people can see how if gold is suddenly up $200, how it changes and what should be fair value for the project at this stage. RW: Would you name some of the com- panies you are following? JK: The one that I am most excited about is Novo Resources. It has a very substantial valuation. The latest financ- ing prices it at $800 million and it doesn`t even have a drill hole on the property. What they have is a context of scalabil- ity such as I have never seen in my career. It is possible that they have discovered an equivalent to the Witwatersrand Reef that