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 : GMD RESOURCE -- Ignore unavailable to you. Want to Upgrade?

To: VAUGHN who wrote (987)	12/31/1999 2:22:00 PM
From: Dave R. Webb	Respond to of 1030

Vaughn, I thought I'd present this in two replies, as you are making some very serious allegations that are based upon you assuming that: a) Trading volume increase are due to insiders buying (largely or solely), and b) Insiders trade in advance of news (generally), and c) Discovery resource calculations are a non-event (generally), and d) The fact that results are anticipated from till sampling sometime in January is a significant event. You are incorrect on the first and second items, but if you really believe it to be true, please send a letter to the: Canadian Venture Exchange Surveillance Department PO Box 10333, 609 Granville St., Vancouver, B.C. V7Y 1H1. Copy this to the B.C. Securities Commission, 865 Hornby ST., Vancouver, B.C. V6Z 2H4. The insider trading reports don't support your conclusions, but you must have some evidence or you wouldn't make these statements in a public forum. I've addressed Discovery separately, but your opinion is not unique. The last item could have been anticipated by anyone in the business, including most investors. It is no secret, and has been stated in news releases, that till sampling occurs during the summer months. It is no secret, and has been reported in news releases that the summer sampling work concluded in September (as is typically the case for most geological work in the NWT over the past 50 or so years). Also, as has been the case for almost all till samples over the past 8 years or so collected by most companies that they be shipped to a processing plant and concentrated. This takes several weeks (check GMD releases since 1994 re: till samples). The concentrates are then picked (this takes several weeks (check GMD releases since 1994 re: till samples)). The picked samples are then microprobed to determine the exact nature of the potential kimberlitic grains (this takes several weeks (check GMD releases since 1994 re: till samples)). The results are then consolidated with previous work, and examined in map form and interpreted based on lithological maps, structural maps, glacial maps, topographic maps, geophysical maps, with the result that target areas are identified for further work or abandonment. The math is fairly simple: September 30 + (10 days shipping) + (30 days processing) + (21 days picking) + (21 days microprobing) + (10 days analysis) + (Screw-up factor (trucking strikes, holidays, sick days, y2k) ) = January. It has always been thus. You could figure out the same schedule for 2000 as well. The conclusions you have arrived at are extremely negative, and suggest a very low opinion of either GMD's directors and insiders, or those of their partners, or both. The opinion you've expressed is arrived at by ignoring the facts (check the insider trading reports), discounting a significant resource estimate and inflating the value of the timing of additional news, the timing of which was established over half a decade ago. I take offense at your allegations, as I have a great deal of respect for my fellow directors, and have the full knowledge that that current management of GMD has installed procedures that minimize any potential for insider trading or tipping. I cannot believe that GMD's partners have anything but the most effective procedures in place to minimize any potential leaks from their side. Dave

To: VAUGHN who wrote (987)	12/31/1999 2:24:00 PM
From: Dave R. Webb	Respond to of 1030

Vaughn, with respect to Discovery Let's see how the math works: You said that Miramar's Con Mine reports a cash cost of production at US$269 per ounce. Their post-strike costs are expected to result in cash costs of US$300 per ounce. Excluding recoveries (mine and mill) and dilution (other than already incorporated into the figures) we have the following: From Miramar's website www.miramarmining.com we see that the Con Mine reports 1,250,000 tons of proven and probable ore at 11.66 grams per ton. These are mixed units, but can be considered equivalent to approximately 1,140,000 tonnes grading 12.83 grams per tonne. One troy ounce weighs 31.103 grams, so Miramar would have to mine 2.424 tonnes to have 1 troy ounce of contained gold. That costs US$269 per troy ounce, so it would seem that cash operating costs are approximately US$111 per tonne. Supporting figures can be found in the costs reported at the Ptarmigan Mine (a smaller mine just outside of Yellowknife, operated by Treminco Resources Ltd prior to 1996) averaged somewhere between US$80 and US$100 per tonne, and Echo Bay Mines' Lupin Mine (winter road access through Yellowknife) at around US$90 per tonne. A simple calculation (not truly valid, but an interesting exercise) at Discovery would say that if one tonne of "ore" can be excavated and processed for US$111 per tonne, and each tonne contains 19.97 grams of gold, then the cash operating costs (excluding recoveries (mine and mill) and dilution (other than already incorporated into the figures) would be (31.103 gms per ounce /19.97 gms per tonne * 111 dollars per tonne) US$173 per ounce. Not a bad figure. Normally, the true calculation would include actual cost figures. I would presume that the costs at Discovery would be adjusted from US$173 per ounce as the grade and tonnage figures would have to be consider "mineable" or "recoverable" ore, shallower mineralization, ramp access, free-milling nature, and no infrastructure. The figures though are in line with the costs at Ptarmigan (smaller operation) and at Lupin (winter road, "remote"). As you correctly point out, there has to be enough mineralization to pay back the capital costs in a reasonable timeframe. The smaller the tonnage, the more difficult it becomes. Currently, Discovery is likely too small to support the capital costs required to construct a mine and mill. But then, so too was the Con Mine when it commenced operations in 1938, reporting less than 100,000 tonnes of ore at a grade of around 29 gpt in ore reserves in its first year. It has since produced more than 5.4 million ounces of gold. One would typically look at the lower class or resources, the inferred to get a sense of the "potential" of a deposit to be expanded. As you point out, all of the capital costs at the Con Mine have been recovered. Yellowknife is a major mining center with abundant related off-site services, and an entire community that can support the mine. Other figures to consider include (with some conversions): Miramar Con Mine Mines ore from depths in excess of 2,000 meters Mills up to 1,250 tonnes per day Ore is mixed, free-milling and refractory, uses an autoclave on some refractory ores Owns own power plant Discovery Resource calculation includes mineralization from surface to 300 meter depth Essentially no infrastructure on site Preliminary metallurgical work shows mineralization to be free-milling Dave

To: VAUGHN who wrote (987)	1/4/2000 11:32:00 PM
From: Richnorth	Read Replies (1) \| Respond to of 1030

OFF TOPIC? If you had sold some of your GMD shares and used the proceeds to buy either Burntsands Inc. (BRT.TSE) or Rocca Resources (RRL.VSE) or both since September, you would have had more than doubled your money by now. I bought 5,000 shares of BRT in September at $1.60 and sold them at year end at $4.20. In mid-November I bought 10,000 shares of RRL at $0.50 and sold them all at $1.00 today. Not bad, eh? Like most investors, I am still waiting for GMD to double. Long shot? By the way, the gold deposits of GMD have been likened to a "dog's breakfast." I am not sure I know what it means. Do you? Does it mean it's cheap and poor quality stuff? Or does it mean that the gold deposits are much too much discrete (i.e. too discontinuous and scattered here and there)? Or whatever? If you don't happen to know, I hope our Doc' would be so good as to venture an opinion.