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Gold/Mining/Energy : Gold and Silver Mining Stocks -- Ignore unavailable to you. Want to Upgrade?

To: baystock who wrote (1454)	6/21/2001 4:16:56 PM
From: Claude Cormier	Read Replies (1) \| Respond to of 4051

<I thought BAY has a marginal deposit at current silver prices, if one were to ignore the higher grade starter pit which gets depleted after the first two years production ? > The first 2 years are extremely profitable and the next 3 are good. Thanks to the high grade starter pit, they will produce 65 millions ounces in the first 5 years, 35 millions unces in the first two years at a cost below $1.55. The 3 following years, the cost moves higher to $3.50 which is still cash flow positive. LOM costs is near $3.00. The cash flows in the first two years should reach some US$100 millions at current metal prices. Subtract USD 50 millions for capital costs and startup costs. That leaves USD 50M pre-tax which is 3X current market valuation. Another unknown specific of Alamo Dorado is the presence of a high grade feeder zone (20++ oz) per ounces for 50 meters width) that goes deep to the south. This is potential source of very high grade material that the company weill investigate in year 3 and beyond. The picture is even better for FGX which is developing a second sub-$100 gold deposit.