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Gold/Mining/Energy : Corner Bay Silver (BAY.T)
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To: Elizabeth Andrews who wrote (956)6/13/2000 11:48:00 AM
From: Claude Cormier   of 4409
 
Hello Eliz,

As you may know, Alamo Dorado has two high grade zone that will likely form the initial starter pits.

The first one is made of some 4.1 millions tons of 150 g/t ounces per ton material (A rock value of some $25/ton). This starter pit is the reason why most analysts have models that generate a very high rate of return and NAV for BAY. That is perfectly understandable, given the low cost of mining for such operation ($3.40 per ton or so).

But the second one is a new zone which was discovered a few months ago. It is now defined for a strike of 100 meters and appears to have a width of some 50 meters. The best holes are:

Hole #8 with a bottom intercept of 43 meters of 231 g/t silver, hole #12 with 52.5 meters of 355 g/t silver and finally hole #49 with 52.5 meters of 719 g/t silver. The fourth hole confirming the zone is hole 13 with a bottom intercept of 42 meters of 100 g/t silver eq. It is too early to calculate a tonnage for this high grade zone, but it is possible to come up with some estimation. This zone is accessible from surface and could be mined in the first few years of the life-of-mine of AD. It appears to have a weighted average of $65 of silver eq. per ton.

I would love to hear from you on the impact this zone might have on the economics of the deposit?

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