Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Winspear Resources -- Ignore unavailable to you. Want to Upgrade?

To: Letmebe Frank who wrote (23484)	7/23/1999 2:49:00 PM
From: teevee	Read Replies (2) \| Respond to of 26850

Frank, Good post....I have also tried to demonstrate WSP's relative value and leverage, but from a diferent angle: Message 10401781 Bottom line is that no matter how the comparisons are done, at this point in time, and at the current price, Winspear has the most upside and leverage compared to peer stocks like DMM and ABZ....I see Willp also threw in second tier plays such as MPV & TAH as well....IMO, it is only a matter of time before the market acknowledges winspear....I also wouldn't be surprised to see money flow out of other diamond stocks and into Winspear. regards, teevee

To: Letmebe Frank who wrote (23484)	7/23/1999 3:24:00 PM
From: russet	Read Replies (2) \| Respond to of 26850

"One Hamster's thoughts", In ground resource is a small factor in evaluating these companies. What is far more important is how much these companies will make money in the years to come. The higher the profit, the higher the share price. The market must believe that the profit will continue and increase in future years, or the stock price will not go up. The current analysis by MRDI from last summer indicates that production will occur at a rate of 1000 tonnes per day. That rate has not been changed by a news release from MRDI, so that is all we got at the present time. Hamster calculation, 1000tpd x ($300 cdn$/tonne revenue-60 cdn$/tonne costs-$40 cdn$/tonne marketing costs) x 350 days x 68% - $20,000,000/year (office overhead, principle payment&interest, misc business and mining costs)= 27,600,000 How many shares will we have when we start making something. My guess with the work yet to do around 65 million. Therefore earnings per share per year of $.42 before tax. Market multiple is debatable, but if we assign SUF's at about 5 times we get $2.10. Using these numbers Winspear is very overvalued. Really only a production increase could improve this, so we can assume the market has that built in already. If production cannot be increased, expect a further downdraft. Another problem,... it's a shallowly dipping dyke. That means there will be lots of hanging wall. Huge sections of this ceiling could require costly reinforcement if there is weakness in it. No one knows what state the ceiling is in, and won't until mining the dyke underground occurs. That introduces an element of risk in Winspear that Ekati does not have, therefore a lower market multiple. I do not agree all the risk is out of this stock. It is just as likely to go up as down. Rate of production is now the key, and no one can determine that at the 95% confidence level until some underground mining is done. Hence the need for the additional bulk sample. I hope the new MRDI figures show an enhanced rate of production is possible,...but it will not be proven. Then we can look forward to an announcement that a PP has been successfully placed (same as last year) and we should see a rise in stock price from there in anticipation of cheap mining costs and increasing profitability through increases in production. If we fail to see proof that profitability will increase, expect a downdraft to much lower levels. A hamster's opinion.