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Gold/Mining/Energy : PLAYFAIR MINING - PLY . V
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To: Brumell who wrote (287)8/16/2001 12:42:30 AM
From: Claude Cormier  Read Replies (1) of 505
 
Hello Bob,

It is usually healthy when there are some disagreement in the market.

<1.Without serious up front money, it doesn't. All PLY would become is a line item on someone's exploration budget. >

I much prefer a commitment to specific exploration spendings within a short time frame and a that the junior be carried to production, than upfront cash.

<2. All majors so far have wanted all the ground. I can see why but what does that leave PLY if major conducts a half-hearted program. >

All they have to do is to negotiate reasonable spending schedule.

<3. A jv. with a major does not lessen the risk. If they find nothing, PLY will crater.>

Agree... but if the senior really believe in the property, they will spend the kind of money needed to discover what has to be discovered.

< However, if drilling is successful, PLY's reward is drastically reduced.>

I don't think that this is true... 30% of a big thing is a lot more than 100% of nothing. Cause with the limited budget PLY will have, the odds are they will find nothing.

<4. As geological stories go, this is a pretty simple one. There's not much in technical expertise a major can bring to the table now. >

We don't need the expertise... we need a million or two of drilling.

< If PLY has adequate funding, they will drill as many holes as any major and possibly more....>

We can disagree I guess... PLY may find 300-400K... but I doubt this will be enough.. What if they don't hit after that. WHat if the deposit still lies below.

<Lastly, I can think of several companies in joint ventures who were successful. They made great fanfare of the major's status. Sounded great but truth was it killed junior's prospects. The discovered assets became an attractive item on the major's balance sheet.... while the junior eroded away.>

A good point. It can happen... But keep in mind that this is a shitty market for financing...and PLY is a $0.20 stock will already quite a few shares out.

<If successful...>

Well then we will all be happy... the problem will be if they are not successful after spending a few hundred Ks?
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