Corner Bay Silver (BAY.T) Message Board

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

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To: Scripts who wrote (1420)	10/6/2000 12:28:16 AM
From: Claude Cormier	Read Replies (1) of 4409

<<Does any of this help in determining the immediate future of BAY?? >> It certainly does not. As for the immediate future of BAY, your call is as good as mine. One thing is sure, the stock is undervalued. Another update came out today, from Pacific International, this time. Wendell Zerb now has a 7.5% NPV of C$89.6 millions ($7.50 per share outstanding)(also this is very close to Nesbitt Burns $C81 millions). That is up from $C70 millions I think. His internal rate of return (IRR) now stands at 55%. He is using CAPEX of US$50M which seems high to me, silver prices of $5.25 and gold prices of $285. At prices of $6.30 for silver he calculates a NPV of $C150 millions (that comes up to approx $12.60 per share outstanding). He has a target of $4.30 for the stock assuming they issue 9 millions more shares to finance development of the mine. I don't think they will issue that much. BAY will finance most of the development through debt if they have to develop this themselves. They have the contacts and support to do it. The question is now: what will trigger the price adjustment? I guess only two events can cause that: a takeover or higher metal prices. Possibly a recommendation by a new analyst would cause some partial adjustment. If BAY goes alone with Alamo Dorado, we can hope for a mine startup in the first half of 2002. Assuming stable metal prices, cash flows would be in the US$30-$35 millions range per year which would mean C$2-$3 per share;. That should be more than enough to cause at least a double in the stock price. I think BAY will be taken over at $5.50-$6.00. What is your guess?

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