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Gold/Mining/Energy : Canadian Diamond Play Cafi

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To: Famularo who wrote (2427)	2/7/2005 6:28:47 PM
From: VAUGHN	Read Replies (3) of 16213

Hello Frank SGF had better hope they average $125/c as their grade, even if only sourced from the Earli Joli intrusion, is horrible! The only way SGF can make serious money is to run a huge volume open pit operation and that will require stripping away over 100meters of overburden before any ore is recovered. On the face of it, that implies a drag line operation such as is used for coal in Germany, Montana and near Edmonton, but the overburden for those coal seams is a whole lot thinner than 100m. $125/c x =/-.06c/t = +/-$7.50 per tonne after overburden removal. So where is the profit? Even Argyl, which I believe has the lowest value/tonne of any operating mine in the world, has a higher value per tonne than that, with a whole lot lower stripping ratio. At some point, the practical numbers are going to pull the rug out from under SGF shareholders. As a foot note, I would be very surprised if SGF gets $125/c run of mine grade. I may end up eating my words, but I'd be willing to make a modest bet that the grade comes in no better than around $40/c and very probably lower than that. Vaughn P.S. Sir Paul still has it... Eh! Not bad for an old f...t.

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