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Gold/Mining/Energy : Corner Bay Silver (BAY.T)
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To: Scripts who wrote (3389)2/19/2002 11:54:32 AM
From: Claude Cormier  Read Replies (2) of 4409
 
Ed,

If all goes as expected (i.e. positive feasibility study with CAPEX inline with prefeasibility numbers, 1/2 equity, 2/3 bank financing), then BAY should end up with some 26M shares outstanding after production financing.

Assuming again that silver prices are stable and that production is more or less what was projected in the pre-feasibility study, then we are talking 15-17M ounces of silver per year in the first two years of production.

On that basis, an increase in $0.25 in the price of silver is worth US $4 millions or so. Take out some 35% income tax max and you will be left with some USD 2,6 millions net profits or CAD $4 millions net profits more or less. That is some $0.15 per share of net profit per $0.25 increase in silver prices.. With a conservative P/E of 5 the stock should gain at least $0.75 each time silver increase by $0.25

Of course, all this is a scenario based on what we know right now. The feasibility study will tell us more. SIlver prices may be higher or lower.
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