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Gold/Mining/Energy : SOUTHERNERA (t.SUF) -- Ignore unavailable to you. Want to Upgrade?

To: Confluence who wrote (3718)	6/21/1999 11:14:00 AM
From: VAUGHN	Respond to of 7235

Hello Confluence Just a quick request. If you are speaking to HB at the AGM or for that matter even CJ, would you mind terribly doing us a favour? Please ask if HB will be answering the questions I posed a week or so back? HB requested my e-mail address by phone but I have not heard from him since. Message 10048800 Thanks GS The short answer and simple answer is anytime you can produce ore for more than it costs you to mine, you have a reasonably good chance of making a profit. Typically a pipe runs $25 to $35/tonne to mine. Anything after that is capital recovery and profit. At $180/tonne, WSP certainly is in the profitable side of the equation however; the disturbing figure in my mind is the variance. From .8c/t to 1.8c/t is a huge divergence for a dike, which typically has a much lower variance than a pipe. This variance calls into question the overall grade therefore value per tonne in the market's mind until much more extensive sampling can confirm overall ore value per tonne averaging roughly in the ranges identified to date. These are not bad numbers by any means, but the market had high expectations and now has questions about grade consistency that they did not have before. Unfortunate, but I expect in the long run the numbers will still be attractive. What I have suggested on the WSP thread in the past was always that the market had a love affair with the word pipes because of the potential of large volume low cost mining. Dike mining can rarely be classified high volume therefore the market can only get excited by WSP if the grade and $/c averages can be boosted to get the $/t average back up into the stratosphere. If it can't, this will be a nice stock to own, but not the home run many had hoped for. Hope no one gets offended, just the way I see it. Regards