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

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From: loantech	4/11/2007 3:47:12 PM
	of 78416

Good WGI/WGDF post from another thread: Randall Oliphant (CEO) of WGI made a good pitch at the AMEX Precious and Base Metals Conference and updated their corporate presentation from their last pitch. It will be available for replay at amex.com The key points: Have 165,000 oz per year coming on in April, 2008 at $345 per oz cash costs and $402 per oz all in costs. At current gold prices, will generate $40m per year in cash flow giving a P/CF of under 7 at current prices. Even at $500 gold, will generate $23m per year in cash flow. The other compelling point he made is that, according to BMO (which has done a good job on this) gold exploration / development companies trade at about $89 per reserve oz. and $319 per oz. when in production. Given that they have all the permitting in place, the financing and proven, successful team, all that is required now is execution and a steady gold price and the stock should triple within the next 12 - 18 months. WGI is valued at $79 per reserve oz. Also, forgot to mention, low technology risk as this mine was in production from 1985 to 2001 before it was closed due to low prices and is now being reopened using the same low-technology (open pit) mining approach. So, cheap on a earnings basis, cheap on a reserve basis, no political risk, no technology risk. I guess the only potential downside is the price of gold. Kind of makes me think I should be trading out of Crystallex and getting even longer WGI. Posted by: bb at April 11, 2007 10:54 AM

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