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Gold/Mining/Energy : Global Platinum & Gold (GPGI)

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To: Richard Mazzarella who wrote (5933)	5/9/1998 12:39:00 PM
From: Zeev Hed	Read Replies (1) of 14226

Richard, people in big corporations (potential JV) are paid to avoid risk, not take risks. I do not think that any of the major will JV with GPGI until they have at least 6 to 12 months of consistent production under their belt. GPGI best bet is to stop "improving" the process, take any one of the processes that works, even if it is less than perfect in extracting "all" the goodies, as long as the process is economical (namely, enough goodies are extracted to pay for the process and leave a positive cash flow stream). If we are to believe only half of the stories we heard in the last few years, their profit margins even on a less than ideal process should exceed 50%, and then scale it up to 20 or more tons per day. Once even if their return is only $400/ton (we heard numbers in the range of $600 to $2500 in the past), they will cover their burn rate and if they can continue this way consistently for six months, then it will be much easier for them to get a JV (if they even need one, since by then the stock should be at $10 or so and they can issue a million share to fund expansion). Zeev

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