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Gold/Mining/Energy : BRE-X, Indonesia, Ashanti Goldfields, Strong Companies.
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To: thebeach who wrote (5772)2/19/1997 7:10:00 AM
From: Bob Fairchild   of 28369
 
We all knew that the Government was going to get 10% no matter what ! This had already been factored into the market price. In reality Bre-X really only had a 80% share of the deposit while negotiating with Barrick and Placer (the other 10% originally belonged to the Indonesian partners). In reality, what they have given up is an additional 35%. For this they will be getting the construction of the mine and my understanding is that Bre-X will NOT be paying part of this. Because the mine is going to cost 2.1 billion Canadian we get a figure of $25/share equivalent to the 35% loss of equity. Yes Bre-X are getting no compensation directly, but the cost of building the mine has to be worth something ? The downside as I see it is temporary !
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