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Gold/Mining/Energy : Pacific Rim Mining V.PFG -- Ignore unavailable to you. Want to Upgrade?

To: Quickdraw who wrote (12978)	4/17/2000 4:00:00 PM
From: Quickdraw	Read Replies (1) \| Respond to of 14627

The following is a compilation of information from a few conversations I have had with Barbara Henderson (PFG IR) of late. Miami Conference: CMS' presentation was similar to the one given at previous conferences. A number of major mining company reps were in attendance. Barrick's intention for Diablillos: No news Financing: PFG continue to weigh a number of alternatives. From my discussions with Barb, I got the impression a financing will conclude before drilling starts, therefore within the next month. Road Construction to the property: Should be complete by the end of April at which time access road and pad construction at the Luicho property will begin. Regarding whether steep slope sampling is showing mineralization: Although results are pending, Barb said "they would be surprised if they do not showing mineralization, as they have been showing good results up ?til now". This news release should include sampling from 30 or so new surface channels and at least 12 cliff samples. Cliff sampling will continue. Regarding high grade mineralization: It is expected (still to be proven), the high grade stuff in the central zone ends 20-30 meters down (where the black sandstone ends), after which a lower grade more than likely continues. There is a strong possibility this high grade mineralization extends to the southern zone. As this is mostly shale covered only drilling will confirm but a tunnel sample previously taken in the southern zone showed high values. DS (Dominion Securities) Barb confirmed that Barrick has been known to regularly use DS, therefore it may (or may not) be them buying. The buying pattern seems consistent with a corporate buyer or an institutional buyer. In January, 700,000 shares were picked up by DS. Buying since then has probably moved DS share ownership to around 1 mill plus shares. Bulk sampling tests: Bulk samples for column leach tests are currently in Reno being prepared. Typically they run for about 40-45 days so they should be ready around the end of June, which is when the first drill results should be announced. Results from bottle roll testing will be included in the next release scheduled for this Thursday. Exercise of Options: To Barb's knowledge around 20,000 have been exercised, which is not significant when measured against the approximately 3 mill O/S Discussion on the property: With the sampling and analysis of the property so far, PFG has done just about everything they can do until drilling starts. While the property appears excellent, only drilling can confirm this. The most significant thing about the property at this stage is the high grade area. There is a good chance this high grade area will persist into the South zone. I asked about the potential of 10 million ozs on the property. I asked her to be as candid as possible and she responded as follows: Statistically there are about 10 projects in the world with 10 plus million oz of gold, therefore the odds are always against finding a deposit this size. Is it possible? Yes, but it is not a sure thing as everything would have to go to the maximum, for this to happen. It might be more likely that a 4-5 million oz deposit may be found, but again this is not a sure thing. From a valuation perspective, Barb mentioned as example that the more ozs found, the better the multiplier. For example, a 3 million oz deposit might be multiplied by $40US per oz while a 7 mill oz deposit might be multiplied by $60US. If the deposit turns out to be small, but is high grade (as the high grade zone(s) appear to be), it is likely PFG would still be able to profit from it even though the share price may fall. It would at the least put a higher base on the stock than the +-$.50 cents it might fall to otherwise. She suggested the market at this price is currently discounting a 1 - 2.5 mill oz deposit. When I asked her to contrast her suggested valuation against similar sized deposits held by other juniors that seemed lesser priced , she reminded me that Peruvian gold is typically considered to have a higher value than some other countries gold. Northern Miner comment: The Northern Miner article suggested Barb had said there was potential to the west, outside the structural corridor. She explained that her comment in the Northern Miner was a direct response to the question "Is it possible there is mineralization to the west of the corridor". That said, Barb explained to me that one of the earlier holes will test this area to the west of the corridor. This area appears to be part of the same sequence of sandstone that exists to the south that is showing mineralization. This area was moved to the north along the strike slip fault, therefore there is potential that mineralization may also exist here as both share the same shale package etc.. Additional points of interest which are positive signs at Luicho: - On a scale of 1-10, quartz is considered as hardness 7 while diamond is 10. While quartz is hard, the structural preparation (fracturing) at Luicho is the key. Because of the fracturing, there are inherent planes of weakness in the quartz which is where the free-gold resides. There are approximately 12 major faults at Luicho with hundreds of smaller faults. Grade should increase closer to the major faults. - Grade is also connected to the degree the structures dip. As example, if the structures dip shallowly (25-30 degrees) it is expected the grade will drop. At Luicho the structures dip 70-75 degrees which is "what we would like to see". - Although the high grade zone will more than likely end in the first of the three sandstone levels mineralization averaging at least 1 gram has been shown to exist in each of the three sandstone levels (at least 175 plus meters down). A few comments from me: I was almost taken aback at Barb's honesty in relaying all this information to me. On the one hand, we as novice investors sometimes prefer to hear only the positive side of the story but here I was receiving a lesson from her on the odds of finding a discovery, let alone a large discovery and the potential valuation of a Peruvian find against the PFG share price. Additionally I had thought to myself that the high grade area may persist at depth but I had now been made aware that it more than likely tailed off at the end of the first sandstone package. I continue to think this property has huge potential, my confidence level continues to grow as it appears do the analysts that follow the company. The financing which will take place soon should provide a strong clue as to the direction the company will take and will more than likely cause some lively debate. Message 12962006 It looks like the next few months should be interesting. Qd