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Strategies & Market Trends : Ride the Tiger with CD

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To: Claude Cormier who wrote (43525)	2/21/2006 1:44:23 PM
From: TrueScouse	Read Replies (1) of 313663

Hi Claude: Good discussion on the comparisons between BCM and WTC. I hold a significant position in both so I'll be happy if one or the other gets taken over at a high price. :^) However, I beg to differ with you about the potential of WTC. I agree with earlier comments (last November?) that the feasibility study on Penasquito was not as positive as the market was hoping for. But, there are some very conservative assumptions in that study. For example, the metals prices used were as follows: Silver: $6.74/oz Gold: $434/oz Zinc: $0.52/lb Lead: $0.37/lb Compare those with today's cash prices: Silver: $9.50/oz Gold: $550/oz Zinc: $0.99/lb Lead: $0.57/lb The current prices are from 25% to 90% higher than those in the FS. Imagine what the FS would look like if it used today's figures? Also, the Penasco deposit has a large oxide cap, the economics of which are not yet fully factored into the FS. It's rich in gold and silver and will be mined first. The Chile Colorado deposit would not be mined until after the first 10 years, according to the FS -- although I suppose that could also change if zinc stays this high. I think that WTC will come up with a new FS incorporating these factors and the project will then become very attractive for a TO. A final thing -- which I've mentioned before -- is that WTC owns 20% of the huge San Nicolas zinc deposit in Mexico (80% Teck). I don't think the market has factored this into the price -- but if zinc stays at these levels, I'm sure Teck will start looking at moving San Nicolas towards production over the next few years. As far as I know if has all the permits and is "ready to go". So, I still think WTC is going to be a $50 stock and may get taken out at that level. JMHO of course. <g> Best regards, Howy

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