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Gold/Mining/Energy : Manhattan Minerals (MAN.T)
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To: Sailfish who wrote (3959)1/14/2000 8:59:00 PM
From: Claude Cormier  Read Replies (1) of 4504
 
Hello Ray,

Basically in-fill drilling includes these drill holes that are within the known perimeter of the resource. They are designed to confirm continuity and grades.

I agree with you that the results on the sulfides were very good and should cause some increase in the copper resources.

As for the market reaction to the news, it is rather neutral and here is why, I think.

The copper/zinc sulfides are a great resource for the long term and any increase should be viewed as positive. However, you must keep in mind that these resources will not be mined before 5 or 6 years as the gold cap must be out of the way first. In other words they will not contribute to cash flows before 6 years.

However, the gold cap is of strategic importance because it will be mined first and will generate the cash in the first 4-5 years. These cash flows must be large enough to pay for the CAPEX, the removal of the town and the diversion of the river. I think they are... but the larger is the gold cap the better it is.

I am sure you are familiar with the discounting mechanism of future cash flows which means that a dollar earned 5-6 years down the road is not worth the same as a dollar earned today.

Since the news were not too good as far as the gold cap is concerned, I think that this good in-fill copper holes brought very little to the whole equation. Would MAN had announced results that confirmed a major expansion of the gold cap to the North, the stock would have reacted upward more strongly.

That is my opinion... for what it is worth.
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