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

To: Claude Cormier who wrote (13148)	5/25/2000 8:57:00 PM
From: Nexus	Read Replies (1) \| Respond to of 14627

Claude, <<Nexus, you know I like these debates <ggg> !>> And I love to get you started... << the discounting mechanism of future cash flows start working only once the operations start. The reason being that, assuming stable gold prices, the property can always be sold for the same millions already discounted over the LOM (Life-of-mine) of the property.>> You are so off the mark on this one it isn't even funny. Yes, discounting future cash flow from any point in time will give you the same value (assuming the conditions are similar and you use the same discount rate of course), but you MUST discount the total calculated value of the project from today until the cash flows begin. For example, if you had a choice to receive $1 million profit (discounted value) from a project that starts today and ends 2 years from today or receive $1 million from the same project that would start 10 years from now and finished 12 years from today, which one would you pick. The first project is much more valuable since if you were able to invest the proceeds for 10 years (the difference between the life of the 2 projects) at 10%, that $1 million would be worth $2,600,000 12 years from today while the second project would be worth only $1 million. That is the argument I have made all along about FGX not being as undervalued as you think since if no one buys them out and they don't have plans to develop the project in the near future, the project loses value in today's dollars. <<Have you study the work done at Marlin and FGX's other newly acquired properties? Have you compared the size of the mineralized zone at Marlin with Luchio ? Have you compared grades, trenches, infrastructure ??>> Have you? Nexus