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Gold/Mining/Energy : Canmine resources

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To: Marshhawk who wrote (2604)	6/7/2000 4:29:00 PM
From: Ralph Kern	Read Replies (1) of 2769

Post by 'one eye' on stockhouse deserves comment. He(she) indicates perhaps 1.5 million in cash flow from processing Agnico material. My interpretation is different, based on data from canmine's Power Point presentation. If we leave phase 2 out of the picture, phase 1 is said to produce 300 tons of cobalt or 660,000 lbs. With Ag and Ni credits it would produce revenues of about 15 million US. Assuming a cost of production of 6$/lb cobalt or about 4 million, this would generate an operating cash flow of about 12 million. Refinery upgrade is about 7 million leaving about 5 million to the bottom line or about 0.10/share. At a P/E of 10-20 the stock should be trading at 1-2$. I left out foregn exchange adjustments would would only improve the bottom line. So we are trading at a discount of 30-70% to anticipated earnings. This is what people were willing to pay earlier this year. I think they had it right at the time. Revenues should increase in phase 2-3. I see no reason to doubt these estimates unless the presumptions on which they are based are incorrect. Ralph.

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