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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: stan_hughes who wrote (8105)	3/17/2006 11:39:39 AM
From: E. Charters	Read Replies (2) of 78411

Well SUR has gold, but it is a lot narrower and lower grade than the promoters would have you guess at. It may be able to drill off a heap leachable or bulk tonnage resource but metallurgy and mining/comminution method has to be feased before you know what the economics of it are. Right now they are in the arm waving promotional stage, and that is a dangerous area to invest in. It is a classic example of bullshit baffles brains. The Internet and the company sold it as a 500 foot wide, 3 gram orebody remniscent of Bre-X, on the basis of one bulk channel and a few historic occurences. It appears by drilling that it may approach 0.65 grams per ton in places over a width of perhaps 218 feet. Not that you could not do something with that with the appropriate tons and the right rock/mineralization, but it has to be looked at in the cold light of dawn, and hole by hole. To get a Fort Knox style low grade full milling operation you need 3 miles of that stuff and continuous. And refractory mineralization as is often found at depth especially in this area could defeat a smaller higher grade resource as it has in the 90's in Indonesia. There are ways to treat a refractory resource, but heap leaching or CIP would not be as successful here. Now I can compare possession of two domestic deposits where over 100 holes in each outline a grade of 16 to 17 grams of 160 to 300 thousand ounces and we only call that inferred. (With true bulk sampling from 15,000 tons to 400,000 tons).. We suffer from overconservatism which in the long run is the wise choice, while they bask in the sun of arm-waving about "the big one". We have seen many resources sold that way, oft in sunny climes, in Latin countries. Some real, some not so real as we hoped. Some get government/population interference early. Some are not as big as they first seem from 12,000 miles away. Promotion may be a necessary evil. It has its dangers and that goes to belief sagging on each new blip of news that does not fit the early hopeful model.. the "inside track". Decent resources get ruined that way and all too often it fits the selling patterns of the seeming promoters all too much in a corollaric fashion. EC<:-}

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