Meridian Gold (N:MDG) Message Board

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Gold/Mining/Energy : Meridian Gold (N:MDG)

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To: Elvis Jones who started this subject	10/28/2000 12:29:25 PM
From: russwinter	Read Replies (1) of 22

MDG holders might want to listen to this: meridiangold.com Co. is superbly positioned, and if they take the proper steps from here, this one could be one of the great gold keeper investments of the next five years. My quick review of the call: Generating operating cash flow of about 70 million a year. With a mkt cap of 370 million that's only 5.3 times C.F. That's just too cheap for a company with possibly the best mine in the world and now well positioned for future growth steps. About 20 million of that will go back into more exploration at El Penon, and five new pipeline projects on Mex, Peru, Chile. Very little needs to be spent right now on El Penon capex. The remaining 50 million will just pile up. The good news is that cash (at 9/30) is up to 52 million (plus 13 million other C.A) and the project loan down to 22 million and other liabilities are 54 million. The margin req. for the hedge book has been removed and book is being reduced. So we are at a point where there is some releveraging potential to the balance sheet especially since MDG is really on the right side of the cash flow curve, a feat all too rare right now in this industry. The issue for me is that overall reserves are only being replaced not grown . Thus my reference to the "proper steps". MDG is now at the point where the next low cost project (or cylinder) needs to be launched. My only concern is that mgt may be unduly cautious about the opportunity right now given the pervasive bear market mentality in the industry? I tried getting a sense of that on the call, but came away uncertain. They may wait too long, because at some point there will be a scramble for the few superlative advanced stage exploration projects out there. The "pipeline" projects will also take too long. My vote therefore is for an acquisition, and my bet is FGX's El Sauzal in Mexico. For background see my post:http://www.siliconinvestor.com/readmsg.aspx?msgid=14656469

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