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

To: marynell who wrote (1239)	1/27/2001 12:57:48 PM
From: Claude Cormier	Respond to of 1907

Marynell, The main difference between BAY and SSRI, is the rate of returns on their projects. SSRI has a lot of silver reserves, but most of them need higher prices, in some case, much higher prices. I really like SSRI and will move into it if silver shows signs of a bull market that will carry AG prices higher than $5.50-$6... The leverage will simply be enormous. But BAY has also that leverage and will still be extremely profitable even if silver prices stay below $5.50 for years. Unfortunately BAY stock is not yet blue sky in the US, but will be soon. I expect hat things will start to change when this happens. BAY has only one deposit, Alamo Dorado in Mexico with 149 millions ounces of silver equivalent resources (85% silver 15% gold). The mineable reserves is 129 millions ounces and growing. The highlights of this deposit are the suberb continuity and silver distribution, the availability of a high grade starter pit, a very low strip ratio and good recoveries for silver ore. The ore is ameanable to heap leaching implying very low CAPEX. These characteristics cause a very healthy 55%+ IRR at Alamo Dorado. That is even better than FGX El Sauzal. BAY's current is now in feasibility study and should come up with bankable study within 12 months. Production is scheduled for 1Q2003. Current forecasts are for BAY to produce 17 millions ounces of silver eq in year 1 and 2 at a cost below $1.50 per ounce and 8-9 millions ounces per year in the next 3 years. Over the lifemine of 10 years, they should produce an average of 8.5-9 millions ounces per year. As you see cash flow will be very large in year 1 and 2 making up the large IRR. What is great is that current market cap of BAY is only $US 17 millions. When you think that cash flows in year 1 will be approximately US60 millions... With CAPEX estimated at only US$40-US$45M... you get the idea You can get more details at cornerbay.com Enjoy the ride on FGX.