Geodex Resources - GXM.V (was Agate Bay ABE) Message Board

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Gold/Mining/Energy : Geodex Resources - GXM.V (was Agate Bay ABE)

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To: Gabe Heti who wrote (1)	11/3/1996 4:43:00 PM
From: GWalker	of 210

I have been trying to keep up with what is going on at Agate bay so I will try to let you know what I've found: The market reacted poorly to the content of news release with Inmet because the figures that were used were very conservative. As was witnessed this week with Inmet's massive writeoffs this seems to make total sense that Inmet took the view. They are worried about overstating any potential reserves. Because the geologist report kept everything very conservative and Agate was not allowed to use any of the figures in a more "promotional" sense (as per their agreement) this left the news release void of any info the Vancouver market is used to seeing. So, Agate quickly commissioned their own geologist report which they feel provides a more accurate representation of what the property is worth and what the costs are. Here are the major changes that should come out with the release. This info was provide by Jason in IR at Agate. - Potential reserves will be upped from 175 million tons to 263 million tons. - Capital costs to build a mine are down to 274 miilion from 412 million. - Grading should be upped to 0.8 or 0.9 from the current 0.64. This info probably will not make the release as they may have to do further drilling in order to confirm it. - The net present value of the mine is being upped to 88 millionUS from 70 millionUS. - Given their 60% interest and approx. 10,000,000 shares outstanding, this would put the figure $6.50 CAN on each share.Since the market will discount this info by around 10% you are looking at around $5.85 a share. I got this info in the middle of the week before Agate had a managment committee meeting, so the company may have adjusted certain figures down a bit to come to the figure of $4.50 that Gabe was quoted. The big hurdle will be to convince investors that this project is financable. The difference between whatever jump the stock will get and the figure of around $5.85 a share should represent any lack of confidence that investors have in this project, so don't expect the stock to shoot up to 10 times its value. In order to get the confidence level up, the company will be touring Toronto during the second week of November to visit the brokerage houses, doing the usual road shows and conventions, talking with the newsletter writers and comming out with a schedule for further drilling. All in all this should be an absolute "no brainer". Agate needs to get the value of their stock in the next couple of months up the at least $2.50-$3.00 (hopefully more) so they can float some more shares and not dilute the base too much, so they will do everything they can to get the price up. The only thing that bothers me a bit is the fact I always assume that the market knows what is going on (heck if I have this info there must be many others with it too) so we should have seen more action on the stock this week. The engineer's report started coming in to their office last Thursday (it came in in bits and peices) so why haven't others seen this "no brainer" aswell? Any thoughts, comments... Yours hoping this week will be very interesting indeed, Graham

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