Pacific Rim Mining V.PFG Message Board

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Gold/Mining/Energy : Pacific Rim Mining V.PFG

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To: Claude Cormier who wrote (13151)	5/27/2000 9:53:00 AM
From: Nexus	Read Replies (1) of 14627

Claude, << If El Sauzal (or any other deposits) has a $100 millions NPV today it will maintain a $100 millions NPV until someone starts developing it to produce the gold.>> If conditions are similar, that is true. the assets are in the ground and they are not leaving from there. I did not disagree on that. <<And if you say that for Francisco it is much better to sell El Sauzal now at $150 millions than keep it idle for 10 years and sell it then at $150 millions, you may be right or wrong.>> I cannot be right or wrong. I AM RIGHT. $150 million now equals $390 million ten years from now if invested at 10%. Which one do you prefer? $390 million or $150 million. If they are waiting for the price of gold to recover, it seems like they are taking a mighty big gamble on the future price of gold. Everyday they wait for gold to recover, they would have to sell the property for a little bit more to account for the lost opportunity. At what price would gold have to be for them to sell the property for $390 million ten years from now? I don't know myself but it must be unrealistic. Perhaps that is why investors have lost faith in that company. They have lost faith in management. On the other hand, perhaps that is why investors have given PFG a vote of confidence. They know that they are planning to sell Luicho to the highest bidder at the proper time during the exploration phase. Shareholder value will then be maximized. Holding on to assets that do not produce any revenues for years does not make sense. Lost opportunity and uncertainty of future gold prices make it a lousy strategy. Nexus

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