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Gold/Mining/Energy : Canmine resources -- Ignore unavailable to you. Want to Upgrade?

To: Ralph Kern who wrote (2729)	11/2/2000 9:19:42 PM
From: Ralph Kern	Read Replies (1) \| Respond to of 2769

Interesting thought. Recent finance theory suggests that R&D investment not properly accounted for, correlates strongly with future returns, and produces much higher returns than similar investment in tangible(or fixed)assets. Canmine has made tangible asset investments in defining Werner Lake , acquiring the refinery and acquiring cobalt feedstock. What seemed to some as 'wasted' consultant fees in previous discussions, in fact was the R&D investment in cobalt processing technology which in the end will be what makes Canmine profitable. The return on this intangible investment is the value added cobalt product soon to be produced. Like most other intangibles, accounting practice does not give it fair valuation as an asset rather than as a cost(see my point about 'wasted consultant fees') and in turn delays recognition of its economic value by way of the delayed market recognition. I suggest that the R&D costs associated with the refinery should be added to Canmine's book value, and future earnings are a direct consequence of taming the technology. For those interested in an academic discussion of intangibles see B. Lev(@NYU). I think the debate applies to CMR as well. Dr. Lev argues that inadequate information disclosure of intangibles gives insiders+/-analysts an unfair advantage in valuation of these companies(high R&D intensity businesses such as internet, high tech, and biotechnology in particular). CMR's use of AGRA's HPAL technology in processing cobalt feed could be viewed in a similar vein. Of course reading the DWA report could bring investors up to speed. I think the report reveals much about where Canmine is going.