Winter in the Great White North Message Board

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Strategies & Market Trends : Winter in the Great White North

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To: marcos who wrote (3877)	1/2/2003 6:35:35 PM
From: tyc:>	of 8273

Beware. What sounds too good to be true probably is just that. But is this bit of logic worth checking out ?! The Sustut Copper deposit is currently the subject of a final feasibility study. If the result of the study is positive, this is going to be a simple quarry operation feeding ore by truck to the Kemess mill. Capital costs should be low. I was reading an (old) Analysts report as it pertained to NGX and came across this sentence:.... "It would add approximately 1.1 million tonnes of ore per year containing 45 million pounds of copper, or about 36 million pounds annually on a recoverable basis, assuming an 80% recovery rate...".(end of quote).. The profits (if any) from this production will be divided equally between NGX and DSR. That means the profits from 18 million lbs of annual production will accrue to DSR. N'est ce pas ? DSR has a total market capitalisation of ~C$8.1 million. . That means that $1,000 invested at today's prices might enjoy the profits (if any) from 1,975 lbs of copper production. By way of comparison, In the last quarter, Aur produced 56 million lbs of copper, so assume that annual production is ~224 million lbs. Aur's market cap is ~ C$338 million. So for every $1,000 of market cap it produces 663 lbs of copper. Aur has debts probably at least as significant as the financing required by the quarry, I would think.

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