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Gold/Mining/Energy : PLAYFAIR MINING - PLY . V -- Ignore unavailable to you. Want to Upgrade?

To: Claude Cormier who wrote (300)	8/17/2001 8:51:25 PM
From: geoffb_si	Read Replies (1) \| Respond to of 505

Hi, Claude: My belief is that they tanked well before the base metals went south. From memory, the original deal called for Teck to earn a 55% (?) interest in exchange for cash payments and work on the property (I can't recall how much work). HOWEVER, this deal also called for WTC to contribute their 45% interest in cash after Teck earned their interest. This was (IMO) the bad part of the deal for WTC, as they weren't carried to production. About 2-3 years ago, WTC got a cash call from Teck that forced them to rewrite the original JV. Teck now has a greater interest (70%?), and also took down a PP in WTC shares. If they do a 70/30 carried-to-production JV , they lose a lot of the speculative appeal of the property. If they do a 55/45 JV, they'll be hit with cash-call after cash-call, and will be at the mercy of the major. That's why it's so important to write a good deal up-front. I think a 60% carried-to-production JV deal would be ideal, but I don't think any major has offered this. That's why I say go-it-alone... Geoff

To: Claude Cormier who wrote (300)	8/18/2001 6:52:20 PM
From: russwinter	Read Replies (1) \| Respond to of 505

I think the primary issue is the complete collapse of base metal prices recently, especially zinc. PLY probably needs to focus on maintaining this prospect and not worry about JVing (unlikely given the economic hurdle for almost all deposits now) or drilling much themselves. Under Mexico's use or lose it mining law the exploration tax schedule is 1.73 PP (US 17 cents) per hectare in year one, then jumps to 5.15 (52 cents) in years 2-4. Costs go to 10.79 (1.08) in years 5-6 (2004-2005). Minimum work expenditures for 50,000 + hectares are a very high 50 NP ($5)/hectare in years 2-4. PLY staked a million hectares in March, 1999. Anybody have the current claim size? Clearly if PLY is going to hold (the objective, IMO) the concession for better days, the most prospective ground only should be maintained and the rest released. That would seem to be the primary goal. Meanwhile market cap is barely over US 1 million ( a bargain for a prospect of this quality), so a home run on an aggressive program is not really required. Raising more than token amounts in a PP would be overly dilutive at 20 cents.