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Gold/Mining/Energy : Gold Reserves Limited GLR - TSE
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To: russwinter who wrote (329)1/28/2001 9:50:47 PM
From: Syncrude  Read Replies (2) of 406
 
russwinter,

I think that most would acknowledge that it would not make economic sense to develop Brisas as a stand alone project. Many have speculated and GLR seems to have confirmed that a pooling of interests with Las Cristinas would offer the best hope of developing Brisas. Unfortunately, for both deposits, the price of gold have turned south and have remained weak. I doubt that the prospects for a significant and sustained increase in the price of gold, would appear good. In fact, I think that the prospects may even get worse before getting better.

The government of Venezuela has done little to get large projects moving and may also be realizing that the economics are not robust. Brisas and Las Cristinas are not the only projects put or left on the back burner.

As for Gold Reserve, as I stated before, I would be concerned that they may be tempted to put money in another project (as announced if I recall correctly), especially in a country such as Venezuela. I think the key is to monitor the burn rate each quarter. The market is probably making a proper allowance for this, and this is why the stock is trading where it is. No one is in a mad rush to offer to buy Brisas outright, nor is anyone stepping up to the plate to offer to co-develop it. So it might be wise to defer to the senior mining companies who are experts in their field. If the seniors don't see value, why would the market get excited.
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