Vendor Consideration of Mineral Properties: Valuation from the Standpoint of the Independent Expert

The paper reviews recent valuations of mineral properties, many of which are at an early stage of exploration. The various methods used are outlined. The problem of comparing, in terms of whether it is fair and reasonable, a highly subjective opinion of the present value of a portfolio of exploration tenements with a vendor consideration, the real value of which, in most cases, lies at some indeterminate time in the future because of the application by the Australian Stock Exchange (ASX) of escrow conditions, is highlighted. Examples are given of some of the questionable logic used by consultants in handling this difficult issue. A proposal for revision to current flotation and listing practice which, the author believes, would circumvent the problem and at the same time provide better protection for the investing public is offered for Consideration.