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Gold/Mining/Energy : Corner Bay Silver (BAY.T)
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To: Jon Matz who wrote (1664)12/7/2000 11:32:56 AM
From: Claude Cormier  Read Replies (1) of 4409
 
<Claude, isn't $5.5 million enough to go into production?>

No. They will need some US$40-45 millions to bring this to production, assuming current projections.

<The news release says they need it for a feasibility study, exploration and corporate expenses. That is a whole lot of money to spend on traditional issues that shouldn't be required with the anything but traditional level of ROI this find has.>

Well $5.5M is very little money for the deposit they have. 106 millions ounces of silver and 400,000 ounces of gold is the equivalent of a 2.3 millions ounces of gold deposit. The industry spends on between $5 and $10 to discover an ounce of gold. In other words, the industry will discover a deposit like Alamo Dorado and bring it to feasibility level for as much as US$23 millions. Many times it is more than that.

With that C$5.5 millions, BAY will have spent a total US$4.5 millions or so on Alamo Dorado...that is 5 times less than the industry.

In short, you will end up with a company that will have 15.5 millions shares outstanding and a 140 millions ounces silver equivalent deposit ready to go into production.

It is also important to understand that the money that will be spent in 2001 is likely to again increase the reserves at Alamo Dorado. There is still blue sky potential. The Northern and Southern section of the deposit are open, also down dip.

And there is that second large anomaly to the south that will be revisited.

What if they discover more silver/gold.

I continue to believe that BAY will be the best silver story in the next two years.
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