Gresham Resources GRC.V Message Board

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Gold/Mining/Energy : Gresham Resources GRC.V

GRC 49.13

-0.5%

3:59 PM EST

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To: reg patel who wrote (25)	12/27/1997 12:19:00 PM
From: Ed Ajootian	of 33

reg, The market is making a big mistake to be ignoring this news IMO. The company is looking into possibly re-entering this well, right now, and turning it into a horizontal well. Horizontal wells drilled into this same formation in the surrounding area have gotten as much as 500 BOD for production. This size well would add C$.16 or so in annual cash flow for GRC. Even just giving the paltry 4 x cash flow multiple that currently is on the stock you get a $.64 pop or about 50% from the current price. Of course if they really got this size a well the market would also start to give value to the other prospects this company has, plus offset wells, etc. So its not hard to see this thing doubling over the next few months. Although horizontal wells cost a lot more than vertical ones GRC is very solid financially and can easily finance their 33% share of the costs from cash flow and borrowing power. Plus, if this really turns into a huge play with a need for some equity financing, this would not be the worst thing in the world since it would likely bring some analyst coverage by the firms that are trying to get in on the financing.

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