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Gold/Mining/Energy : Gold and Silver Mining Stocks

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To: goldsheet who wrote (1324)	6/9/2001 4:18:57 PM
From: russwinter	Read Replies (1) of 4051

We were wondering before about FN's strategy. This from the April 30 letter to shareholders in the annual I just received. "Warren Buffet, the world's most famous investor has it right when he states that wonderful bargains are available when you purchase 15 to 20% of uncontrolled companies. If entire companies are sought, a control premium must be paid. An investment, done in cooperation with the management and made into the treasury of a precious minerals company can help immediately rerate and strengthen that company. It also allows Franco-Nevada to influence (my comment: including hedging?)the future direction of it's investment. As the Company improves and the gold industry further consolidates, we believe such strategic equity positions may become very valuable." Also this rather shocking remark, "Our studies, and those of our peers, indicate that 90% of gold projects require at least $350 POG to generate after-tax returns in excess of 10%." They also suggest that $300 for reserve pricing is overstating values. They then go on to suggest that most seniors are overpriced, and are of no interest to FN.

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