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Gold/Mining/Energy : ARP - V Argentina Gold
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To: charred who wrote (1627)12/12/1998 11:33:00 PM
From: Daytek77  Read Replies (1) of 3282
 
Sorry charred, It is you who is incorrect.
Barrick states that Pierina has 8 million oz of gold and 56 million ounces of silver. This equals approximately 16 million oz of gold equivalent. Here is a direct quote from the Barrick site:

"The Pierina mine is on track for completion in late 1998, with estimated construction costs of $260 million dollars. Annual production for the first three years is expected to be 750,000 ounces of gold, at $50 per ounce. At year-end, Barrick increased reserves to 7.2 million ounces of gold, bringing total reserves and gold minerlized material at this 100% -owned mine to more than 8 million ounces. Pierina also has 56 million ounces of silver, which will reduce costs by approximately $15 per ounce."

Using your own figures :

"They already invested over $1.5 billion CDN, and just produced their first bar of gold a few weeks ago. Kind of expensive isn't it."

The fact is that 8 million ounces of gold and 56 million ounces of silver represent approximately $U.S 5 billion worth of ore. This is unhedged!

8 million oz of gold x $300 gold and 56 million ounces of silver @ $4.80 per ounce. This is at current prices.

Of course Barrick hedges their production so it is worth more. Like I said if Arequipa knew what the property actually contained Llowel and Catherine-Mcleod Seltzer would have played it out. In fact Barrick mentions that they quickly increased the number of drill rigs from 71 to 270 right after the purchased. They(Mcleod-Seltzer and David LLowel) wanted to cash out. I remember this because I was a shareholder of Arequipa at the time and talked to Catherine many times months prior to the deal.

Tony
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