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Gold/Mining/Energy : ABER RESOURCES

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To: Lorne who wrote (810)	11/10/1998 5:33:00 PM
From: teevee	Read Replies (1) of 2006

Hi Lorne, An International Resource House like RTZ can arrange non recourse financing on a project this size because the lenders know that even in the unlikely event that it failed, they would get their capital back. In the case of Aber, assuming that they could find a lender who only wanted his money back, plus a return on his capital, what kind of asurances can Aber provide? To put it into perspective, Metal Mining sold there interest in the giant Peruvian Cu-Zn-Ag deposit (Antimina) to Noranda and Teck because their market capitalization and turnover wasn't big enough to handle the size of the project(ie. they didn't qualify for debt financing). Aber is not carried through to production like Diamet was. IF they can sell US$300 million in equity, that will be dilutive (I am sure that the group who did the last equity financing have sobered up by now). I would be suprised if they could find debt equity. In addition, although the number of carats per tonne are high, the value per carat is at the lower end of the market-not a good place to be IMO. So now you have some of my thoughts on Aber. I believe it will be very interesting to see just how this all unfolds. regards, teevee

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