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Gold/Mining/Energy : Francisco Gold - FGX.V -- Ignore unavailable to you. Want to Upgrade?

To: Nexus who wrote (768)	5/4/2000 8:39:00 AM
From: russwinter	Read Replies (1) \| Respond to of 1907

Ultimately these plays are about how many ounces are confirmed and at what price they can be developed for (capital cost) and at what price (cash cost)they can be mined for. Intangibles such as political risk can be considered as well(most would rate Mexico better than Peru) Then the question becomes what does the market pay. FGX has one of the best low cost deposits in the world yet the stock capitalization net of cash is only US28 million: 15.3 million shares X $5.50= 84 million CDN X 68 cent conversion rate= US57 million minus US25 million cash= net US28 million for 3 million confirmed reserves and resources plus the Marlin prospect. PFG has an early stage prospect with promise yet the stock capitalization net of cash is US67 million: 22.0 million shares X 4.80= 106 million CDN x 68 cent conversion rate= US72 million minus 5 million cash= US67 million. In my personal valuation models PFG is priced about right if not a bit high, and it certainly has substantial downside if it disappoints. FGX is substantially undervalued, with downside limited to the rather illiquid trading characteristics we have been discussing, rather than fundamental risk. Therefore I come down squarely on the side of Claude in this debate. FGX is the strong buy. PFG is a marginal hold at best, but a serious exploration stock to be watched.