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Gold/Mining/Energy : Greenstone Resources GRE.T or GRERF OTC -- Ignore unavailable to you. Want to Upgrade?

To: CLK who wrote (905)	6/30/1999 10:56:00 AM
From: richard badauskas	Read Replies (1) \| Respond to of 1005

My GUESS is that GRE is now able to manage its short term debt of about US$30M. Prior postings indicate free cash of US$0.5M in May and about US$0.8M in June. Just MAYBE this is now sufficient to allow GRE to manage its short term debt with the help of the local banks and creditors. ASSUMING further, if production ramps up to 25,000 ozs per month by December (another guess, say production is ramping up in excess of budget as indicated in Press Releases). End of March GRE was at 10,000 ozs per month and averaging over each qtr. to Dec. rate, we get 15,000 ozs per month end of June qtr., 20,000 ozs per month end Sept. qtr, and 25,000 ozs per month by end of December qtr. AND we assume over that time that average free cash is US$100 per oz. We have total production in those 9 months of about 100,000 ozs x US$100 = US$10M. (add in about US$1M free cash for Santa Rosa). GRE can manage US$3.1M debt payment in August and about US$7M to manage office overheads and short term debt. REMEMBER by December at a rate of 25,000 ozs per month free cash increases to around US$2.5M per month or US$30M per year to manage all debt. MY GUESS IS THAT THE MARKET SENSES THAT THIS IS NOW A POSSIBILITY. IF PRODUCTION CONTINUES TO INCREASE OVER THE NEXT TWO MONTHS AS PLANNED GRE HAS AN EXCELLENT CHANCE TO SURVIVE. IF GOLD PRICES SPIKE ABOVE US$275 IN THE NEXT FEW MONTHS GRE WILL HAVE TRUE "BLUE SKY" UPSIDE FOR A RALLY BACK TOWARDS US$1-2 PER SHARE (AS THE EXCELLENT CASH FLOW WILL BE ABLE TO EASILY MANAGE DEBT BALLON PAYMENT OF US$100M IN 2002).