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Gold/Mining/Energy : Canmine resources

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To: Marshhawk who wrote (2689)	8/28/2000 8:21:19 PM
From: Ralph Kern	Read Replies (1) of 2769

At the estimates we thought were reasonable, i.e,., cash flow of 0.20/share for phase one production of 300 tons of cobalt, CMR is currently trading at 3xcash flow. For phase two production of 600 tons, and cash flow of 0.40/share CMR is trading at 1 1/2x cash flow. With a 5 million share dilution(2.5M$@0.50/share) and a 7.5M$ line of credit(as arranged) the cobalt refinery can be brought to capacity. I believe this may occur by the end of this year. Analysts will have to cover an integrated producer. I think the market would price CMR at 8xcash flow(50% discount to its peers as the new kid on the block). Nonetheless that would price CMR at 1.60 at the start of phase one and 2.40 at the start of phase two. That is how I view the market's response to the start of production at the end of this year. Of course BINCO speculation, interesting developments at Maskwa and Temagami drill results could render these predictions conservative underestimates. Anyways that's my spin.

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