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Gold/Mining/Energy : Corner Bay Silver (BAY.T)
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To: IngotWeTrust who wrote (3884)4/25/2002 4:56:44 PM
From: Lalit Jain  Read Replies (2) of 4409
 
gold_tutor, UR right. $2.50 may be optimistic.

Given the risks, the cost of capital for C'Bay will surely be much higher than for an established producer like Barrick. This will raise the discount rate used to calculate the IRR, thereby reducing the rate of return.

Additionally, the lending institution will probably require C'Bay to hedge most of it's future production thereby eliminating leverage to future upside in Ag prices.

Given this, there is little upside from here, but a huge downside risk.

Family is fine.

Cheers, Lalit Jain
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