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Gold/Mining/Energy : Twin Mining (formerly Twin-Gold) -- Ignore unavailable to you. Want to Upgrade?

To: VAUGHN who wrote (211)	2/6/2002 5:00:18 PM
From: WillP	Read Replies (1) \| Respond to of 613

Ekati’s cash and none cash costs per carrat appear to total $79.70 per carrat. Well, that's real close to my $80 estimate per tonne, so I'm comfortable so far, as the grade is about one carat per tonne. Based on the previously quoted realized price of $247 per carrat, I interpret the $165 per carrat price to be net of the aforementioned costs. This seems to be confirmed in reviewing data in BHP’s Annual Reports. Still in Canadian dollars...OK. If you assume a grade of 0.225 carat per tonne, and a diamond value of $250 (Canadian), then you get a rock value of only $56 per tonne, Canadian. I think you'll want to go higher. Use $250 US, and the rock value suddenly becomes about $86 (Canadian) per tonne. That's not much better than the total costs, however. That's where your greater efficiencies come in. Assuming that JI can be mined at double the rate of Ekati, and costs are lower, then I suppose you could drop the operating costs to the $40 per tonne range, or maybe $50, in theory at least. That would give you a "net revenues" of about $40 per tonne, although I think this is optimistic. In any case, that's about 28 million x $40 = something real close to what you had. Assuming 40% share realizes $422 million or $5.47 earnings per share. Uh, cash flow, you mean? There are royalties and taxes to be considered. Taking a more conservative gross value of $150 per carrat OK, in US dollars. That's a rock value of $54 per tonne, Canadian. Suddenly it becomes close; revenue vs. expenses. In the ball park? There could be glaring errors in my math, but I'm not going to fret until I see some hard numbers out of Twin. In the meantime, it all seems in the general realm of possibility, but a favourable outcome will be entirely dependent upon grade and value. I can imagine shareholders will be holding their breath as the results get close. If there is a decent grade and value, then it will get fun. Diavik and Ekati notwithstanding -- as they say, mines are made, not found. Regards, WillP