Business Valuation

OCTOGONAL RESOURCES (ORS)

Analyst recommendation: BUY

Background on OCTOGONAL RESOURCES (ORS)

Octagonal Resources was incorporated in September 2010 to acquire the Victorian gold projects of Alliance Resources Ltd, Matrix Gold Ltd and Highlake Resources Pty Ltd and an emerging Western Australian gold project generated by Newmont Asia Pacific to form a new company that has the drive and energy to successfully develop these assets.

Octagonal Resources Limited is a Gold mining focused company with significant landholdings in under explored areas of Australia's two most prolific gold producing terrains which include;

- The Bendigo Zone of the Lachlan Fold Belt in Victoria

- Eastern Goldfields of the Yilgarn Craton in Western Australia

Octagonal Resources was established to create a self-funded gold company with open pit and underground mineable resources that can be exploited to fund long term growth through the discovery and development of gold operations in under-explored areas.

Valuation of OCTOGONAL RESOURCES (ORS)

Using the Asset-Based valuation model to value Octogonal Resources, the following table summarises the results from the appendix;

VALUE OF EQUITY $417 178 400

SHARES OUTSTANDING 100 000 000

VALUE PER SHARE (417178400/100m)= $4.17

CURRENT SHARE PRICE 15.5 cents

Refer to Appendix 1.1 for full workings.

Decision:

Yes I do agree with the buy recommendation as the results of the Asset-Based Valuation show that the share price would