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Gold/Mining/Energy : Aurora Platinum Corp, ARP
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To: hank2010 who wrote (23)12/22/2000 1:47:13 AM
From: Elizabeth Andrews  Read Replies (2) of 157
 
Your calculation of the royalty is incorrect. I'll take you through the math if you wish. A 5.5% NSR is a lot more onerous than just deducting 5.5% from the gross ore value.

Aside from that, as long as the net smelter value of the ore is at least twice all costs it doesn't matter what the mineral is or the width of the structure. If this measure is true, then the deposit usually becomes a mine. It is an economic issue and nothing else.

If you check out Meridian Gold you will find that they mine very high grade gold over narrow widths. The company gets a reasonable multiple because the high grade veins are fairly continuous so the exploration and development expenses are low compared to the value of the ore developed. Having reserves is important as is the predictability of the structural setting and the knowledge of ore controls. MSK has yet to establish any of this and they are prospecting with a drill, which is a poor business plan in my view. Check out some of the gold mines in Ontario with respect to predictable settings.
I think MSK should just publish the assays and let us decide what's what don't you? They could save us all this guessing. Ill be the first one to buy the stock if they can establish grade, width and continuity.
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