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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (2256)	10/18/1999 5:53:00 PM
From: Claude Cormier	Respond to of 8010

Koanhead, Bay has a resource of 77M ounces with 66.5M in the mineable category. However, recent drilling is showing a much higher grade in some critical part of the deposit as well as much wider mineralization. This will not only increase the resource by possibly as much as 50% but also will likely had more to the mineable category. 135M ounces may be too optimistic...we will find out soon. Also the odds of a second discovery in the south zone could also increase this number. On another issue, no matter what are the reserves, one must always evaluate the its quality. Would you prefer to ownn a 100M ounces deposit with cost near $3/ounce or a similar deposit cost near $1.50/ounce. BAY starter pit is likely to produce silver at lest than $1.50 for the 1st 5 years. That will be a big bonus that will give them a IRR in excesss of 50%.

To: koan who wrote (2256)	10/19/1999 5:36:00 PM
From: Claude Cormier	Read Replies (1) \| Respond to of 8010

Played with the numbers from BAY last press release today. And I think they really have a deposit that will allow them to produce silver at an average of $1.25 per ounce for the first 7 years of operations (near $1 in the first 2-3 years and near $1.50 in the following 3-4 years), producing between 4 and 5 millions ounces of silver per year. They would then produce at the same rate for an aditional 8 to 10 years at a price slightly above $2. (Alternatively, they may increase throughput and produce 6-7M ounces of AG-eq for 12 years or so) I estimate thy will end up with a net asset value in excess of $5.50 per share once the feasibility is in. Bet on a IRR well above 50%. BAY (or whoever take it over) will be extremely profitable.