EX-99.6 7 a11-31282_1ex99d6.htm EX-99.6

Exhibit 99.6

 

 

In connection with the filing of a management information circular by Minera Andes Inc. dated December 13, 2011 and the disclosure of a “prior valuation”, as such term is defined in Canadian Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions (“61-101”), in such management information circular, the following historic document is being filed in order to comply with Section 6.9 “Filing of Prior Valuation” of 61-101.

 

181 Bay Street, Bay Wellington Tower, Suite 4750, P.O. Box 792, Toronto, Ontario Canada M5J 2T3
Tel: 647.258.0395 Toll Free: 1.866.441.0690 Fax: 647.258.0408
Website: www.minandes.com Email: info@minandes.com

 


 

 

 

US Gold Corporation

Estimation of Fair Value of the
US Mineral Interests
As of November 1, 2009

 

 

 


 

DUFF & PHELPS, LLC · 345 CALIFORNIA STREET, SUITE 2100 · SAN FRANCISCO, CA 94104 · TEL 415-693-5300 · FAX 415-693-5301

 

 

EDWARD G LEE

Managing Director

TEL 415-693-5333

FAX 415-693-5301

 

Edward.Lee@duffandphelps.com

 

February 24, 2010

 

Private and Confidential

 

Ms. Ha Tran

Controller

US Gold Corporation

99 George Street 3rd Floor

Toronto, Ontario, Canada M5A 2N4

 

Subject:

 

Valuation Services in Connection with the Estimation of Fair Value of the US Mineral Interests, as of November 1, 2009

 

Dear Ms. Tran:

 

Pursuant to our Letter of Engagement dated December 18, 2009, Duff & Phelps, LLC (“Duff & Phelps”) has performed services in connection with the estimation of Fair Value of certain mineral properties (“Subject Assets” or “US Mineral Interests”) held by US Gold Corporation (“US Gold” or the “Company”) in accordance with the provisions of Accounting Standards Codification (“ASC”) §360 (formerly Statement of Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets”). We understand that the results of our analysis will be used by US Gold management (“Management”) for financial reporting purposes. Our analysis was conducted as of the Company’s annual impairment test date, November 1, 2009 (the “Valuation Date”).

 

Definition of Value

 

ASC §360 uses the Fair Value definition in ASC §820 (formerly Statement of Financial Accounting Standards No. 157, Fair Value Measurements), which defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date” (“Fair Value”).

 

ASC §820 states that a fair value measurement assumes the highest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible at the measurement date. In broad terms, highest and best use refers to the use of an asset by market participants that would maximize the value of the asset or the group of assets within which the asset would be used. Moreover, the highest and best use is based on the use of the asset by market participants, even if the intended use of the asset by the reporting entity is different.

 


 

The highest and best use of the asset by market participants establishes the valuation premise used to measure the fair value of the asset: 1) in-use, if the asset would provide maximum value to market participants principally through its use in combination with other assets as a group, installed or otherwise configured for use; or, 2) in-exchange, if the asset would provide maximum value to market participants principally on a standalone basis. For purposes of this Engagement, we will assume the Company’s existing business to be ongoing (in-use premise).

 

Accounting Standards Codification §360

 

ASC §360 requires that a two-step test be performed in evaluating the impairment of a long-lived asset or group of long-lived assets. The “First Step” of the annual asset impairment test is the estimation of total undiscounted cash flows, to be generated by the long-lived assets through their remaining useful lives, as of the measurement date.

 

Considering the Subject Assets are in the exploration phase and Management does not feel they have sufficient available evidence to estimate future cash flows based on reasonable assumptions, we have prepared an estimate of Fair Value through the application of the Market Approach. In the absence of cash flow estimates, we have compared the Fair Value of the Subject Assets to the carrying value as a part of the First Step.

 

If the Fair Value estimate of the Subject Assets exceeds the carrying value, the execution of the “Second Step” of the asset impairment test under ASC §360 is not required.

 

Sources of Information

 

In the course of our valuation analysis, we have relied upon financial and other information, including prospective financial information obtained from Management and from various public, financial, and industry sources. Our conclusions are dependent on such information being complete and accurate in all material respects. Unless otherwise noted, all figures included in the report and the exhibits are expressed in terms of U.S. Dollars.

 

The principal sources of information used in performing our analysis included:

 

·                  Discussions with Management concerning the history, current state, and future operations of the Company and the Subject Assets;

 

·                  Mineral property complex detail provided by Management in the following Excel files: Long-lived assets write off 9.30.09.xls and 10k Property Charts_ruth_edits_01-11-2010.xls;

 

·                  The most recent 10-Q and 10-K released by the Company for the periods ending September 30, 2009 and December 31, 2008, respectively;

 

·                  Control premium research prepared by FactSet Mergerstat LLC.;

 

·                  Standard & Poor’s Capital IQ database of publicly traded companies and transactions;

 

2


 

·                  Transaction data regarding gold project sales, assembled by the Metals Economics Group;

 

·                  Research and analysis of public information related to Subject Assets; and

 

·                  Other data sources, analyses and inquiries as we considered necessary.

 

Procedures

 

In general, our procedures included, but were not limited to, the following:

 

·                  Analysis of conditions in, and the economic outlook for, the gold mining industry;

 

·                  Analysis of general market data, including economic, governmental, and environmental forces that may affect the values of the Subject Assets;

 

·                  Discussions concerning the history, current state, and future operations of the Subject Assets with Management;

 

·                  Discussions with Management to obtain an explanation and clarification of data provided;

 

·                  Analysis of financial, transactional, and trading data for companies engaged in the same or similar line of business as the Subject Assets to develop appropriate valuation multiples and operating comparisons used in the application of the Market Approach; and

 

·                  Analysis of other facts and data considered pertinent to this valuation to obtain a conclusion of Fair Value.

 

History and Nature of the Business

 

Overview of US Gold Corporation

 

Based in Toronto, Canada, US Gold engages in the exploration and development of precious metals properties primarily in the United States. The Company was founded in 1979 as Silver State Mining Corporation, but changed its name in 1988 to U.S. Gold Corporation, and again on March 16, 2007 to US Gold Corporation. The Company’s common stock is listed on the American Stock Exchange (AMEX) and on the Toronto Stock Exchange (TSX) each under the symbol “UXG.”

 

In March 2007, US Gold completed the acquisition of three independent exploration companies: White Knight Resources Limited, Nevada Pacific Gold Limited, and Tone Resources Limited. This transaction significantly expanded the Company’s presence in the Cortez Trend in Nevada and included certain mineral rights in Mexico. The Company now controls an exploration property portfolio covering approximately 260 square miles in the Elko, Eureka, Lander, and Pershing counties in Nevada in addition to exploration properties located in Mexico.

 

3


 

US Mineral Interests

 

The Subject Assets were tested for impairment in accordance with ASC §360 as of November 1, 2009. The US Mineral Interests are comprised of the following major gold complexes located in the state of Nevada: Tonkin, Gold Bar, Limo, and Battle Mountain. Additionally, the Company owns several other exploration properties throughout Nevada that were not classified as a part of a specific gold complex.

 

The majority of US Mineral Interests are located along the Cortez or Carlin trends. In particular, the Tonkin, Gold Bar, and Battle Mountain complexes are located along the Cortez Trend. This highly prospective trend comprises the southern portion of what has been long known as the Battle Mountain-Eureka Trend in north central Nevada. New interpretations of the Cortez Trend’s Carlin- style geology over the last few years have caused many experts to believe that the Cortez Trend may eventually rival or even surpass the Carlin Trend, which is one of the top three goldfields in the world. (3)

 

Valuation Methodology

 

In the absence of cash flow projections for the US Mineral Interests, we relied upon the Market Approach to estimate the Fair Value of the Exploration Properties.

 

Market Approach

 

The Market Approach is a valuation technique that provides an estimation of Fair Value of a business, business ownership interest, security, or asset by using one or more methods that compare and correlate the subject to similar businesses, business ownership interests, securities, or assets that have been sold. Considerations such as time and condition of sale and terms of agreements (where available) are analyzed and adjustments are made, where appropriate, to arrive at an estimation of Fair Value.

 

The Market Transaction Method, a variation of the Market Approach, includes indicating the Fair Value based on exchange prices in actual transactions. The process essentially involves comparison and correlation of the subject asset with other similar assets. Considerations such as location, time of sale, physical characteristics, and conditions of sale are analyzed for comparable properties and adjustments (when appropriate) to the prices observed are made to indicate a current value for the subject assets.

 

(3) William Fox: “Description of Cortez Trend,” www.safehaven.com;

 

4


 

Application of the Market Transaction Method

 

As discussed earlier, the Market Transaction Method entails estimating the Fair Value of an asset based on exchange prices in actual transactions. The process essentially involves comparison and correlation of the subject asset with other similar assets. This variation of the Market Approach results in an indicated Fair Value of a marketable, controlling interest in the business or asset.

 

In our application of the Market Approach, we considered transactions involving comparable gold exploration properties in Nevada. In selecting comparable transactions, we utilized several resources, including Capital IQ, comparable company press releases, and a transaction database compiled by the Metals Economics Group (“MEG”). It should be noted that adjustments for differences in factors described earlier (i.e., size, growth, profitability, risk, and return on investment) are difficult to make on early or exploration stage gold mining projects.

 

In order to apply the Market Transaction Method to develop market multiples, we sought transactions involving gold exploration stage properties located on or near the Cortez and Carlin Trends. To this end, we identified eleven transactions involving land packages that closely resembled the US Mineral Interests. Utilizing data from these transactions, we were able to compute a ratio of the purchase price to the acquired land. Recognizing the recent run-up in gold prices, we indexed this transaction multiple to the historical gold price. Within this indexed sample, the median price paid per square mile of land acquired was approximately $1.22 million per square mile (“Transaction Multiple”). Please see Exhibit III for our estimate and detailed calculations of the Transaction Multiple.

 

Valuation of US Mineral Interests

 

As of the Valuation Date, the US Mineral Interests were comprised of 259.59 square miles of land. Three of the properties comprising the US Mineral Interests were subject to Joint Venture agreements, where third parties had the right to “earn-in” to ownership positions in the properties, in exchange for compensation (in the form of cash and stock) and exploration expenditure commitments. Two of the Exploration Properties, New Pass and Squaw Creek were under Joint Venture agreements with Bonaventure Enterprises Inc. (“Bonaventure”), who had a right to a 50% earn in option; in addition, Teck Cominco had the right to earn a 51% interest in Fye Canyon. In order to account for these earn-in options, we applied a probability of fulfilling the option agreement requirements. Using the probability, we determined the value of US Gold’s interest by subtracting the probability adjusted earn-in amount, i.e. 50% for the Bonaventure agreements, from the overall value of the property. This loss of interest in the property was offset by the probability adjusted payment, as specified under the Joint Venture agreement, that US Gold would be expected to receive.

 

Discussions with Management indicated that Teck Cominco was unlikely to earn in; as a result, a 0% probability of fulfilling the agreement was assumed. For the Bonaventure agreements, Management indicated they are somewhat likely to earn-in; as a result, a 50% probability of their meeting the payment/expenditure commitments was applied.

 

5


 

Accounting for US Gold’s estimated ownership interests, the Company controls approximately 244.86 square miles as of the Valuation Date. In order to determine the Fair Value of the US Mineral Interests, we applied the Market Transaction Method. Through application of the Transaction Multiple to the land-area controlled by the company, we obtained a Fair Value for the US Minerals Interests of approximately $297.94 million. Details of our analysis, as discussed above, are presented in Exhibit II.

 

Reconciliation of Market Capitalization

 

To ensure the indication of value obtained through application of the Market Transaction Method was reasonable, we compared our concluded results with US Gold’s market capitalization as of the Valuation Date. This process further involved comparison of the Transaction Multiple with the land-area multiple implied from the market capitalization of US Gold.

 

The first step in reaching the implied land multiple was to determine the implied Fair Value of equity for US Gold recognizing the market capitalization indicates a value on a minority interest basis. To obtain the Fair Value of equity on a controlling basis, a control premium needed to be applied to market capitalization. This premium is used to account for a controlling shareholder’s ability to influence management’s decisions and, therefore, yield a higher value than a minority shareholder who is unable to control the operations of the business.

 

Observed control premiums from the gold industry can vary widely; control premium research prepared by FactSet Mergerstat, LLC indicates that over the last two years gold companies have obtained premiums ranging from nil to in excess of 100% with a median of 27%. Through the application of a 20% control premium, the market indicates a value for the US Mineral Interests that is consistent with the results obtained through application of the Market Transaction Method.

 

In order to apply the control premium, we subtracted the cash from the market capitalization, as cash is not subject to a control premium. Following the application of a 20% control premium, we added the cash back to obtain a Fair Value of equity for the Company on a controlling basis.

 

In order to estimate the implied value of the US Mineral Interests from US Gold’s Fair Value of Equity, we added operating liabilities and subtracted all assets excluding the US Mineral Interests. From this result, we computed a ratio of Fair Value to land-area resulting in an implied land-area multiple of $1.35 million per square mile, which reasonably corroborates our Transaction Multiple of $1.22 million per square mile.

 

6


 

ASC §360 Impairment Analysis Conclusion

 

ASC §360 states that impairment is determined by performing the First Step, whereby the carrying value of the asset or group of assets is compared with total undiscounted cash flows generated by long-lived assets through their remaining useful lives, as of the measurement date. If the total of the undiscounted cash flows is greater than the carrying value, no further analysis is required and an impairment loss is not recognized. In the absence of cash flows, we have compared the Fair Value of the US Mineral Interests with their carrying value.

 

Based upon our analysis, the concluded Fair Values for the US Mineral Interests exceeds the carrying values of the assets, indicating no impairment. Accordingly, we have not performed the Second Step of the asset impairment test under ASC §360. Exhibit I summarizes our analysis as discussed above.

 

A summary of our conclusion is presented below:

 

Carrying Value of US
Mineral Interests as of
11/01/09

 

Fair Value of US Mineral
Interests as of
11/01/09

 

Impairment
Test

 

$

233,302,820

 

$

297, 938, 220

 

Pass

 

 

7


 

Limiting Conditions

 

Any advice given or report issued by us is provided solely for your use and benefit and only in connection with the services that are provided hereunder. Except as required by law, this report shall not be provided to any third party, except that it may be provided to your independent auditors, legal and tax advisors, and other jurisdiction regulatory authorities. Notwithstanding the foregoing: (i) you shall not refer to us either directly by name or indirectly as an independent valuation service provider (or by any other indirect reference or description), or to the services, whether in any public filing or other document, without our prior written consent, which we may at our discretion grant, withhold, or grant subject to conditions, and (ii) in addition to the foregoing prohibitions and requirements with respect to all third parties, submission of our report or any portion thereof to, or responding to any comment letter issued by, the Securities and Exchange Commission, or their respective staffs, or any written or verbal references to us, our report or to the services in such a response is subject to you providing us with prior notice, and allowing us to provide input as to the content of such response. In no event, regardless of whether consent or pre-approval has been provided, shall we assume any responsibility to any third party to which any advice or report is disclosed or otherwise made available.

 

Our procedures did not include investigation of, and we assume no responsibility for, the titles to, or any liens against, the Subject Assets. Furthermore, we assume there are no hidden, unapparent, or unexpected conditions that could affect the value of the assets and accept no responsibility for discovering such conditions.

 

While our work has involved an analysis of financial information and accounting records, our engagement did not include an audit in accordance with generally accepted auditing standards of the Company’s existing business records. Accordingly, we assume no responsibility and make no representations with respect to the accuracy or completeness of any information provided by and on behalf of Management.

 

Budgets/projections/forecasts relate to future events and are based on assumptions that may not remain valid for the whole of the relevant period. Consequently, this information cannot be relied upon to the same extent as that derived from audited accounts for completed accounting periods. We express no opinion as to how closely the actual results will correspond to those projected/forecast by Management.

 

In accordance with our agreement, this report is limited to estimating the Fair Value of the Subject Assets. Additional issues may exist that could affect the local jurisdiction tax treatment of the Subject Assets with respect to which we have prepared this report. This report does not consider or provide a conclusion with respect to any of those issues. With respect to any significant local jurisdiction tax issue outside the scope of this report, this report was not written, and cannot be used, by anyone for the purpose of avoiding local jurisdiction tax penalties.

 

8


 

The valuation of companies and businesses is not a precise science and the conclusions arrived at will of necessity be subjective and dependent on the exercise of individual judgment. There is therefore no indisputable single value and we normally express our opinion on the value as falling within a likely range. However, as the purpose requires the expression of specific values, we have adopted values that we find to be both reasonable and defensible based on the information available.

 

If you have any questions or comments, please do not hesitate to contact me at (415) 693-5333.

 

Yours sincerely,

 

 

 

 

 

Duff & Phelps, LLC

 

By:

Duff & Phelps, LLC

 

 

Edward Lee

 

 

Managing Director

 

 

9

 


 

EXHIBITS

 

 


 

U.S. Gold Corp.

 

Exhibit I

ASC §360 - Impairment Analysis

 

 

As of November 1, 2009

 

 

Summary of Impairment Analysis

 

 

In U.S. $ (Unless Otherwise Noted)

 

 

 

11/01/09

 

11/01/09

 

 

 

Carrying Value of US

 

Fair Value of US

 

Impairment

 

Mineral Interests (1)

 

Mineral Interests

 

Test

 

$

233,302,820

 

$

297,938,220

 

Pass

 

 

Notes:

(1) Per discussion with Management, Carrying Value of US Mineral Interests on 11/01/09 is estimated based upon the book value of Mineral Interests as reported on 09/30/09 less Mexican Mineral Interests of $7,448,487.

 

1


 

U.S. Gold Corp.

 

Exhibit II

ASC §360 - Impairment Analysis

 

 

As of November 1, 2009

 

 

Project Valuation

 

 

In U.S. $ (Unless Otherwise Noted)

 

 

 

US Gold Complex

 

Trend /
Location

 

Claims

 

% Owned

 

Optioned
to 3rd Pty

 

Probability
of Fullfilling
Option Agrmt.

 

Sq Miles

 

Land
Multiple
($000 / sq mi) (1)

 

Fair Value
of US Gold’s
Interest ($000)

 

Tonkin Complex Properties

 

US Gold’s Historic Tonkin Property

 

Cortez

 

1,478

 

100

%

 

 

 

 

43.06

 

$

1,217

 

$

52,395

 

Cornerstone

 

Cortez

 

156

 

100

%

 

 

 

 

4.61

 

1,217

 

5,609

 

Keystone

 

Cortez

 

371

 

100

%

 

 

 

 

9.91

 

1,217

 

12,058

 

Fye Canyon

 

Cortez

 

345

 

100

%

51

%

0

%

11.03

 

1,217

 

13,421

 

Pat Canyon

 

Cortez

 

178

 

100

%

 

 

 

 

5.49

 

1,217

 

6,680

 

Patty

 

Cortez

 

544

 

30

%

 

 

 

 

18.12

 

1,217

 

6,614

 

South Keystone

 

Cortez

 

28

 

100

%

 

 

 

 

0.90

 

1,217

 

1,095

 

Total Tonkin Complex

 

 

 

3,100

 

 

 

 

 

 

 

93.12

 

 

 

$

97,874

 

Gold Bar Complex Properties

 

Benmark

 

Cortez

 

100

 

100

%

 

 

 

 

1.99

 

$

1,217

 

$

2,421

 

Celt

 

Cortez

 

638

 

100

%

 

 

 

 

20.08

 

1,217

 

24,433

 

Cottonwood

 

Cortez

 

216

 

100

%

 

 

 

 

6.81

 

1,217

 

8,286

 

Gold Bar Horst

 

Cortez

 

183

 

100

%

 

 

 

 

5.71

 

1,217

 

6,948

 

Gold Pick

 

Cortez

 

32

 

100

%

 

 

 

 

1.00

 

1,217

 

1,217

 

Goldstone

 

Cortez

 

142

 

100

%

 

 

 

 

4.42

 

1,217

 

5,378

 

Hunter

 

Cortez

 

60

 

100

%

 

 

 

 

1.72

 

1,217

 

2,093

 

Ian

 

Cortez

 

56

 

100

%

 

 

 

 

1.78

 

1,217

 

2,166

 

McClusky Pass

 

Cortez

 

243

 

100

%

 

 

 

 

7.82

 

1,217

 

9,515

 

RCN

 

Cortez

 

76

 

100

%

 

 

 

 

2.37

 

1,217

 

2,884

 

South Cabin Creek

 

Cortez

 

87

 

100

%

 

 

 

 

2.34

 

1,217

 

2,847

 

Tonkin Summit

 

Cortez

 

186

 

100

%

 

 

 

 

5.68

 

1,217

 

6,911

 

Vermouth

 

Cortez

 

85

 

100

%

 

 

 

 

2.73

 

1,217

 

3,322

 

Gold Bar North

 

Cortez

 

19

 

100

%

 

 

 

 

0.59

 

1,217

 

718

 

Kobeh

 

Cortez

 

133

 

100

%

 

 

 

 

4.30

 

1,217

 

5,232

 

Roberts Creek

 

Cortez

 

54

 

100

%

 

 

 

 

3.02

 

1,217

 

3,675

 

Total Gold Bar Complex

 

 

 

2,310

 

 

 

 

 

 

 

72.36

 

 

 

$

88,047

 

Limo Complex Properties

 

Limo

 

Carlin

 

1,392

 

100

%

 

 

 

 

44.04

 

$

1,217

 

$

53,587

 

North Battle Mountain Complex Properties

 

BMX

 

Cortez

 

483

 

100

%

 

 

 

 

16.40

 

$

1,217

 

$

19,955

 

Valmy/East Marigold

 

Cortez

 

181

 

100

%

 

 

 

 

2.91

 

1,217

 

3,541

 

Total North Battle Mountain Complex

 

 

 

664

 

 

 

 

 

 

 

19.31

 

 

 

$

23,496

 

East Battle Mountain Complex Properties

 

Slaven Canyon

 

Cortez

 

68

 

100

%

 

 

 

 

2.01

 

1,217

 

2,446

 

West Battle Mountain Complex Properties

 

Timber Creek/HITS

 

Cortez

 

311

 

100

%

 

 

 

 

9.98

 

1,217

 

12,144

 

Fish Creek

 

Getchell

 

75

 

100

%

 

 

 

 

2.42

 

1,217

 

2,945

 

Total West Battle Mountain Complex

 

 

 

386

 

 

 

 

 

 

 

12.40

 

 

 

$

15,088

 

Other United States Properties

 

New Pass

 

Austin-Lovelock

 

107

 

100

%

50

%

50

%

3.48

 

$

1,217

 

$

3,176

 

South Carlin

 

Carlin

 

72

 

100

%

 

 

 

 

2.01

 

1,217

 

2,446

 

Squaw Creek

 

Carlin

 

151

 

100

%

50

%

50

%

4.72

 

1,217

 

4,307

 

Red Ridge

 

Carlin

 

67

 

100

%

 

 

 

 

3.97

 

1,217

 

4,831

 

Big Antelope Springs

 

Getchell

 

24

 

100

%

 

 

 

 

0.77

 

1,217

 

937

 

Kent Springs

 

Getchell

 

10

 

100

%

 

 

 

 

0.32

 

1,217

 

389

 

Buffalo Canyon

 

Walker Lane

 

33

 

100

%

 

 

 

 

1.08

 

1,217

 

1,314

 

Total Other Properties

 

 

 

464

 

 

 

 

 

 

 

16.35

 

 

 

$

17,400

 

Total US Properties

 

 

 

8,384

 

 

 

 

 

 

 

259.59

 

 

 

$

297,938

 

 

Notes:

(1) Details on land multiple can be found in Exhibit III.

 

1


 

U.S. Gold Corp.

 

Exhibit III

ASC §360 - Impairment Analysis

 

 

As of November 1, 2009

 

 

Market Transaction Approach - Land Multiple

 

 

In U.S. $ (Unless Otherwise Noted)

 

 

 

Date

 

Buyer

 

Properties

 

State

 

County

 

Trend/Location

 

FV/
Acquisition
Price ($000)

 

Sq Miles

 

Implied Multiple
($000/sq mi)

 

Gold Index

 

Adjusted Implied
Sq. Mi.
Mult. ($000/sq mi)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9/30/2004

 

Agnico-Eagle

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trend

 

Nevada

 

Eureka

 

Cortez

 

$

430.9

 

4.4

 

$

98.1

 

278

 

$

272.8

 

 

 

 

 

NSR

 

Nevada

 

Lander

 

Cortez

 

632.5

 

9.2

 

68.4

 

278

 

190.4

 

 

 

 

 

Empire

 

Nevada

 

Washoe

 

Wind Mountain

 

316.3

 

2.7

 

115.7

 

278

 

321.6

 

 

 

 

 

Camp Douglas

 

Nevada

 

Mineral

 

Silver Star District

 

106.7

 

1.5

 

71.8

 

278

 

199.8

 

 

 

 

 

Saw Tooth

 

Nevada

 

Humboldt

 

 

 

106.7

 

0.3

 

413.3

 

278

 

1,149.4

 

 

 

 

 

Jakes Wash

 

Nevada

 

White Pine

 

Carlin

 

106.7

 

1.0

 

106.7

 

278

 

296.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total: Contact Diamond

 

 

 

 

 

 

 

1,699.9

 

19.1

 

88.9

 

278

 

247.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1/19/2005

 

Barrick

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long Peak

 

Nevada

 

Lander

 

Cortez

 

4,114.3

 

1.0

 

4,247.0

 

266

 

11,285.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/29/2005

 

Placer Dome

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mill Creek

 

Nevada

 

Lander

 

Cortez

 

3,753.7

 

1.1

 

3,336.6

 

262

 

8,732.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8/4/2005

 

Agnico Eagle

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Buffalo Valley

 

Nevada

 

Lander

 

Eureka

 

2,518.2

 

7.5

 

335.8

 

257

 

864.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9/27/2005

 

Barrick

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Horse Mountain

 

Nevada

 

Lander

 

Cortez

 

2,135.3

 

4.5

 

474.5

 

247

 

1,172.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2/8/2006

 

Agnico Eagle

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granite Mountain

 

Nevada

 

Lander

 

Eureka

 

755.5

 

0.5

 

1,510.9

 

203

 

3,068.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/12/2006

 

Midway Gold Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lyle Campbell Trust

 

Nevada

 

 

 

Cortez

 

 

 

14.4

 

 

 

 

 

 

 

 

 

 

 

Jessup Property

 

Nevada

 

 

 

 

 

 

 

3.5

 

 

 

 

 

 

 

 

 

 

 

Monte Property

 

Nevada

 

 

 

Cortez

 

 

 

2.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total: Pan-Nevada Gold Corp.

 

 

 

 

 

 

 

14,987.0

 

20.8

 

721.2

 

179

 

1,290.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3/16/2007

 

YGC Resources LTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jerritt Canyon

 

Nevada

 

Elko

 

 

 

140,450.0

 

62.1

 

2,260.8

 

172

 

3,890.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4/18/2007

 

Miranda Gold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPM

 

Nevada

 

Humboldt

 

Eureka

 

2,640.5

 

3.6

 

733.5

 

166

 

1,216.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4/17/2008

 

Miranda Gold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pequop Mountaints

 

Nevada

 

Elko

 

Pequop

 

490.9

 

1.0

 

490.9

 

124

 

608.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8/28/2008

 

Miranda Gold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Red Canyon

 

Nevada

 

Eureka

 

Eureka

 

5,532.5

 

7.7

 

718.5

 

134

 

965.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Median

 

 

 

 

 

 

 

 

 

 

 

$

4,114.3

 

7.7

 

$

721.2

 

 

 

$

1,216.8

 

 

1


 

U.S. Gold Corp.

 

Exhibit IV

ASC §360 - Impairment Analysis

 

 

As of November 1, 2009

 

 

Fair Value Reconciliation

 

 

In U.S. $ (Unless Otherwise Noted)

 

 

 

Implied Multiple with 20% Control Premium

 

Market Capitalization

 

 

 

$

329,110,703

 

 

 

 

 

 

 

Less: Cash (1)

 

 

 

44,192,107

 

 

 

 

 

 

 

Market Cap Less Non-Operating Assets

 

 

 

$

284,918,596

 

 

 

 

 

 

 

Plus: Control Premium @

 

20%

 

56,983,719

 

Plus: Cash

 

 

 

44,192,107

 

 

 

 

 

 

 

Fair Value of Equity (controlling, marketable)

 

 

 

$

386,094,422

 

 

 

 

 

 

 

Plus: Operating Liabilities (1) (2)

 

 

 

8,145,513

 

Less: Total Assets Excluding US Mineral Interests (1)

 

 

 

63,962,892

 

 

 

 

 

 

 

Implied Value of Mineral Interests

 

 

 

$

330,277,043

 

 

 

 

 

 

 

Total Square Miles of US Mineral Interests (3)

 

 

 

244.9

 

 

 

 

 

 

 

Implied Multiples ($000 / sq mi)

 

 

 

$

1,348.86

 

 

 

 

 

 

 

Transaction Approach Implied Multiple ($000 / sq mi)

 

 

 

$

1,216.79

 

 

Notes:

(1) Based on 09-30-09 Balance Sheet.

(2) Operating Liabilities equals Total Liabilities less Deferred Income Tax Liability.

(3) Total Square Miles of US Mineral Interests at US Gold’s ownership share.

 

1