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Gold/Mining/Energy : AVL.V - AVALON VENTURES
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To: DRT who wrote (504)1/29/1998 2:11:00 PM
From: DRT  Read Replies (2) of 1474
 
This is a required reading - detailed 13-page report!!!!

WORLD CLASS RARE METALS DISCOVERY COULD BE VALUABLE FOR GLASS INDUSTRY
by Alan Ferry, BRENARK RESEARCH, January 28, 1998.

Copies are available from IR, but here are a few of the highlights regarding BIG WHOPPER:

1. "... U.S. $600-950 million worth of petalite in situ - plus indications of other valuable metals such as tantalum. Avalon's capitalization is only 2% to 3% of this value."

2. "We are estimating a minimum target price range of $3.00 to $5.00 for AVL shares."

3. "The geometry is ideal for low cost, bulk mining. Low cost, open pit production could be possible for many of the early years...Mining and processing costs could be in the $25 to $35 per tonne range indicating a gross operating profit margin of about 75%. This is analogous to a gold mine with cash costs under US$100 per ounce and 2 million to 3 million ounces of reserves."

4. "... earnings per AVL share figures averaging $0.50 to $0.75 in the base case (US$200 per tonne of petalite) and cash flow per share in the $0.60 to $0.80 range."

5. "... the market potential is 500,000 tonnes per year or 250% above the current levels... the market study indicates that the glass container market could add 350,000 tonnes per year of petalite equivalent demand...".

This is the most concise overview of the 'petalite' market I have read. It answers the key questions many investors had regarding the market potential and confirms what I have learned to date + more. Some of the information is from the results of the market study - money well spent (to say the least).

DRT
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