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Gold/Mining/Energy : Magnesium Alloy Corp. (MGAC.U - Cdn unlisted)
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To: Tom McIlwain who wrote (44)8/15/1998 3:53:00 PM
From: GlobalMarine  Read Replies (1) of 103
 
Tom: At this very early stage, they are looking at a number of financing sources, such as:

1) European Merchant banks.

2) World Bank? (I know they insure projects in developing countries for political risk but I don't know if they also provide project financing).

3) Joint Venture partner. This is perhaps their most desirable option. Bill Burton told me himself he doesn't want MGAC to be a mining company per se. The goal of MGAC is to make money for its shareholders and ideally a JV partner would come in, build and operate the plant, while MGAC sits back, relaxes and collects its cut. Hence, the goal of the feasibility studies is to do enough groundwork to attract a JV partner.

4) Of course, financing could involve a combination of 1) through 3) too.

BTW, the work is proceeding according to plan, and it really looks like they will complete the pre-feasibility according to schedule and under budget. Perhaps it's because of the sad state of the mining industry and mining stocks that Bill Burton is proceeding at a fast clip to move this project forward so as to enhance shareholder value. We could use a winner in the resource sector right about now. The nice thing about this project is that the speculative risk appears not to be whether the ore body is economic but on issues of political risk and electricity generation.

I should also point out that the current stock price is below that which PP holders paid and also below their warrants, so a single stock price runup could double your money easily. Bill Burton says that because the company did its $3 million financing via private placement and not public offering, the company isn't really on anyone's radar screen yet. If you're interested in buying, now is the time.

Rand
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