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Gold/Mining/Energy : JAB International (JABI)
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To: Lord Smooth who wrote (2512)1/8/1998 3:17:00 PM
From: Lord Smooth  Read Replies (1) of 4571
 
Good news today. Impressive that gross margin/oz is $96. Next question to ask is what is pretax margin/oz? If you assume that other expenses are at least $4 million per year (conservative estimate) this will give you a shot at answering this question.

The key question is: How quickly will BCMD get this ore out of the ground?

60 oz per day other expense is est. at $256/oz
160 oz per day other expense is est. at $95/oz
300 oz per day other expense is est. at $50/oz.

Assume 60 million shares outstanding and $95/oz gross profit to offest above expense and see what you get.

60 oz per day: Annual loss of $0.04 per share
160 oz per day: Breakeven
300 oz per day: Annual EPS of $0.07

Combine this with the fact that there are potentially 10 million warrants and a larger number of private shares that are 1/3 or less than the current stock price.

Comments?

Thanks.

Schopenhauer

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