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Gold/Mining/Energy : Canmine resources

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To: Marshhawk who wrote (2728)	10/31/2000 10:55:51 AM
From: Ralph Kern	Read Replies (1) of 2769

Front page of DWA report(20 pages). See www.dwamine.com for details. Essentially points out that CMR is a unique, vertically integrated, specialty metal producer. DCF analysis suggests that CMR has an NPV of 1.69 for 300 tons of 10$ cobalt. Zero NPV is estimated at cobalt price of 4.35$/lb. As CMR is planning to quickly ramp up to 1200 tons the DCF analysis will have to be recalculated. I think the time line will be 1-2 years. The discount rate depends on the cost of capital which we are not privy to. The NPV may be as high as 3-4$ for 1200 tons of Co value added product. This project is at the point of no-return. Final financing decisions should be imminent. Good news as you say. Better news still to come. See below: Sector Base Metals Listed Toronto Stock Exchange Code CMR Recent Share Price C$0.57 52 Week Share Price Range C$1.25 - C$0.42 Shares Outstanding (Basic) 55.5m Fully Diluted 63.5m Market Capitalisation C$31.6m Average Daily Volume 52,000 Long Term Debt Nil Cash (June 30th) C$0.9m Major Shareholders Management & Directors 20% Canmine is Canada's only emerging integrated cobalt producer. The recently purchased Canmine Refinery is due to start production of value-added premium priced cobalt compounds by the end of the second quarter 2001. Cash flow and earnings positive within 18 months of startup. Value added compounds sell at 30% - 35% premium to the cobalt price. Canmine has secured 15,000t of cobalt/silver rich residue feedstock located 3km from the refinery at minimal cost and has located secondary, high-grade cobalt feedstocks in the USA. Strong management team with particular focus in sales and marketing. Large, highly prospective exploration properties north of the Thompson Nickel Belt. C$1.69/share NPV based on US$10.00/lb cobalt price. NPV-breakeven long-term cobalt price; US$4.35/lb. Multiple uses for cobalt with no link to any specific economic cycle. Strong growth in battery market expected to keep cobalt market in balance. Canmine is a unique, emerging cobalt vehicle with the right assembly of assets to lever into the premium priced cobalt compound market. Currently undervalued, one-year target price range C$1.15 - C$1.20. DAVID WILLIAMSON ASSOCIATES LIMITED Regulated by The Securities and Futures Authority R E S E A R C H R E P O R T Canmine Resources Corporation 26th October 2000 A New Cobalt Producer

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