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Gold/Mining/Energy : A to Z Junior Mining Research Site

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To: 4figureau who wrote (231)	6/20/2002 2:09:16 PM
From: GeoDude	Read Replies (1) of 5423

4F, A couple of comments on SML vs NGX (keep in mind that I view SML as a good speculative play with many unanswered questions. 1) gold grade at NGX is higher than SML (0.7 vs 0.4g/t). Cu grade similar. The profits are in the gold so this is bad. 2) NGX has proven reserves, SML has a WAG resource estimate 3) NGX has $200MM worth of plant and equipment paid for (debt removed very recently). 4) I don't think NGX will have spare capacity for a while i.e. they don't need SML's ore and SML would have to build a $200MM+ facility to monetize their reserves. 5) When comparing purchase/acquisition price, you should be real careful in using gold-equivalent figure when Cu is involved due to the different view on price of Cu vs Au. I would guess Cu-converted to gold would attract a lesser valuation than pure gold. Conclusion: SML is an interesting play but they need to discover some higher grade stuff (than NGX) to make their property worth something. Until then, it is only a trading play. Caveat: if Au or Cu prices go up and up, the above is less important and the stock will skyrocket ... IMHO of course LIA

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