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Gold/Mining/Energy : Crystallex (KRY)

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To: E. Charters who wrote (7326)	3/23/1998 11:55:00 AM
From: Gutman	Read Replies (2) of 10836

Since you seem to imply that Las Cristinas is a viable property at present gold prices, I invite you to submit a discounted cash flow analysis based on the data that Placer has presented publicly: cash cost of USD$200 per ounce (including copper credits) and a capital investment of USD$600 million, with production to begin in 2 years. Make any assumptions you want about how the capital costs will be financed (debt/equity). Your approach to value is apparently at odds with that of John Kaiser,who has not commented on KRY but did warn his subscribers in another well known situation: Bre-X. Before the fraud was uncovered he said that even if Bre-X had 70 million ounces, only negligible value should be attached to the income from gold mined 30+ years in the future. Las Cristinas has the gold, but does it have the cash flow at current gold prices to justify its market cap? That is the $200 million dollar question.

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