There is a bit of perspective that needs to be considered as to why there was no immediate change in value. 

 

In a nutshell, Gaoua is not their primary project.  If it were then people would be looking at an interesting >3B lb copper project with gold by-products.  Using very rough calcs, it would have a capex of anywhere from $400m to $1B and a conservative cashflow would be about $1/lb (using conservative averages from among copper producers).  I'm not a financial guy, but I would guess the NPV would be in excess of $1B and so on a per-share basis eventually it would have an approximate "worth" of $6/share based on the current share float (which we know is not realistic but I will assume anyways).  That would make it a nice enough project with what would seem to be good enough economics to develop.  The geology/geography is a bit of an issue, because Gaoua consists of mulitple deposits spread out over something like 30kms.  The two primary deposits are about 6kms apart.  That makes for higher fuel costs, unless they go with a mega-long conveyor system (!).  Gongondy is the largest of all the deposits and by itself has about 2B lbs of copper. 

 

However, Kiaka is the primary project and so while the resource estimate for Gaoua gives the company a greater global resource estimate, there are no cost-efficiences with the two projects.  One is a gold project and the other is a copper project.  They require different processing streams.  So, they can keep spending money on it if they want, but they won't be able to raise funds for both projects at the same time.  That means that Gaoua doesn't have much value in the forseeable future other than as a potential way to raise some money, and that is what the market is saying.  They realize that its only current use is to raise funds, and not very much at that.  At 3B lbs and its current stage of exploration, a typical transaction is going to probably be in the 4 cents per lb range which means about $12m-$15m.  (NGeX sold Hambok for about $5m of up front cash and $7m once commercial production is reached, and it was just over 2B lbs of copper plus zinc, gold and silver credits).   If they really got lucky, they might get $20m but that would be a premium and I don't see that happening given the copper grades. 

 

If they don't want to sell it, then the better answer is to spin it out and make a go of it on that basis.  Otherwise, Gaoua won't be built until after Kiaka goes into production and starts generating cashflow.  With such a long time horizon on it, there is really no current value. 

 

eebler