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Gold/Mining/Energy : Gold Price Monitor
GDXJ 94.04+0.6%Nov 21 4:00 PM EST
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To: Zardoz who wrote (23930)12/7/1998 12:50:00 PM
From: E. Charters  Read Replies (1) of 116764
 
Well it depends on what you know about industry practice and particularly Dome's practice. IF you were to speculate that if they don't add to their reserves in the next 5 years then they will only be able to add X to their ounces and only mine Y without buying new properties and were to evaluate their worth as a company by the figure in their annual report then you would be wrong, dead wrong. The annual report is entertainment. The geology department is what counts. I figure after 22 years in the business and knowing a few former exploration managers for this company that you can read between the lines. Evaluating the worth of such companies is what I do. Of course it is moot but so what? In fact Dome is evaluated at 300 dollar gold when in fact they are getting 400 dollars an ounce. So they are fundamentally undervalued. The American habit of evaluation gold mines is to multiply their reserve ounces time the $50.00 US and dividing by the shares out. But in fact before 1996 no Canadian Gold mine was selling at less than $85.00 US per ounce in reserves. And that may because CDN producer ounces are conservatively evaluated in toto. I would hazard a guess that Dome is selling for over a $100.00 US per stated ounce reserves even now. I would say at $40 they were a tad high in price though.

mailto:echarter@vianet.on.ca

The Canadian Mining Newsletter
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