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Gold/Mining/Energy : Golden Eagle Int. (MYNG)
MYNG 0.0700+5.7%Feb 21 4:00 PM EST
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To: Vince Moretto who wrote (19629)6/22/1999 2:01:00 PM
From: Claude Cormier  Read Replies (1) of 34075
 
<<All kidding aside, I would be interested in your thoughts on the bulk mining/sampling strategy that continues to pervade the Cangalli deposit and it's technical reports. i.e.: >>

I think that "Capistrano" is not exactly my type. But I'll answer your question anyway.

I would agree with anyone who say that bulk samples is a good strategy for this type of deposit for two reasons: first there is ample conglomerates on surface, the gold grades are sporadic and not evenly distributed. A small pilot plant could start processing these samples on short notice. Not too expensive.. OTOH, it will take a long time and a lot of money over time to prove a reserve like it was mentioned in the previous promotion campaign.

I think it is more appropriate to forget the possibility of the zillions ounces and try to prove up a small but economic section that could be mined using open pit bulk mining, proceed with mining and generate cash flows. Eventually more money will be available for allocation on exploration expenses.

This being said, it has a major implication for shareholders. Over the short and medium term, forget about building large proven gold reserves and forget about producing gold on a large scale. In other words, forget about a high price for the stock. Producers of 50-100K ounces per year are priced like GE is right now.

But over time, everything is possible, especially if gold prices increase.
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