Corner Bay Silver (BAY.T) Message Board

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Gold/Mining/Energy : Corner Bay Silver (BAY.T)

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To: russwinter who wrote (1120)	7/14/2000 8:44:17 PM
From: Claude Cormier	Read Replies (3) of 4409

<<How much do you think a mining operation would cost and how long would it take to construct? >> Current estimates are for Capex of US$35-$40M. And this operation could be built in 9-12 months. << The problem as I see it is that the market will give no premium to them if they try take this puppy into production.>> I agree. That is why many will have taken some profits when the discovery cycle peaks this next fall or winter. During the following feasibility/development cycle (if BAY ever develops the mine itself), the price will consolidate lower unless silver prices are strongly moving higher. But after the start of production, then the stock will resume upward if all goes well. Higher silver prices will then have immediate effect on the stock price. I believe that the next financing will be at much higher levels... with production financing still at least 12 months away, if BAY goes alone. I don't think there will be heavy dilution. They will be in a position to borrow part of the funds and finance the rest through equity at a price that could be well above $5. We will see how this develops... No matter what, I will be among those who will take partial profits in the months ahead, hopefully at more than 2X current price. <<I think the Pangea model is the way to go.>> It worked fine and that is great if you have somewhere else to put your money in. But you know you are leaving a lot on the table. Barrick will get the benefit of the next 10M ounces that will be discovered on the PGD properties. << I'll bet that BAY gets mired at $3 if they lean towards a production play, and investors who see it my way will get out. >> BAY has no intention to decide anything just yet. For now they are discovering the size of their silver resources and defining the future operating parameters. This will likely be completed next fall or winter. This is when we will either take some/most of our profits or wait hoping for a suitor. << Are you saying large or mid tier producer interest would be limited because of inexperience with this kind of operation? >> It could be. But I am not sure. This is rather an exceptional deposit. There are no 150M ounces heap leaching silver deposit. Coeur D'alene has one similar operation and they are busy with it. They have the cash to buy BAY, but they are not said to be aggressive in their business plan and they also have heavy debts. Maybe a mid-tier gold operator will be interested. I heard that Glamis Gold was looking at it. Apex silver is also another potential suitor... PAAS possibly in a stock offering. Of course, if Alamo Dorado grows to 200M+ ounces, it could attract the more diversified majors like Teck an others.. They will take any deposit capable of generating cash flows of $20M per year for several years. We never know. It is too early to say. For now, the next sequence of event includes: 1) results from the high grade zone 2) more recovery numbers 3) pre feasibility and new reserves calculation All this in the next 2-3 months. This could be well enough to push the stock to NAV level and possibly much higher if the high grade zone is what I and others hope it is. CC

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