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Gold/Mining/Energy : Precious and Base Metal Investing

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To: LLCF who wrote (32331)	11/15/2004 10:43:40 PM
From: The Vet	Read Replies (3) of 39344

That Wheaton Silver deal is rather weird; a straight bet on the POS. If silver really flies then Silver Wheaton do very well but if the POS stays under $10 an ounce it isn't worth anything to Silver Wheaton. The sellers have just got $50 m cash and $3.90 an ounce which gives them the equivalent of 10 years sales of all their silver at the present spot price. They retain some upside through the shares and warrants and if the POS drops they have effectively locked in the sale of their total production at something over $6 an ounce for the whole life of the deal (exact amount depends on the fluctuations of the POS and the interest rates).

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