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Gold/Mining/Energy : Pangea Goldfields T.PGD -- Ignore unavailable to you. Want to Upgrade?

To: timbouctou who wrote (1007)	5/30/2000 12:40:00 PM
From: russwinter	Read Replies (1) \| Respond to of 1178

With POG at $275 it would be hard to justify $60 unless you had a cash and capital cost of under $100. Typically value/oz as a % of pretax margin is given as 30% ($275 POG-$80 total cost= $195 pre tax margin X 30%= $59/oz). Do you think the economics are that robust? If cash and capital costs were $150 which seems consistent with Geita and Buly, then you come in at about my $35 number. The other variable are ounces and POG and I'm assuming Tulawaka will soon have more than a million. Higher POG gooses up the price per ounce very nicely (325 POG-150 total cost= $175 X 30%= $53), and then we are closer to your number. This leverage to price illustrates why the juniors with good deposits are probably holding out. Obviously a very dynamic situation dependent on costs, POG, ounces and competition from various majors.