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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Elizabeth Andrews who wrote (2245)	3/8/2002 9:29:02 AM
From: Claude Cormier	Respond to of 39344

Well Eliz, Isn't the best way to evaluate economics of a project to use the IRR. Alamo Dorado is in the 50-60% range while El Sauzal is in the 35-45 range. What you say is true. El Sauzal has better recoveries and the grades at BAY goes down after 5 years. <Also the strip ratio of BAY increase dramatically after year 5> But this is not true. The strip ratio goes up moderately. What counts after all is the amount of cash you get out for the amount of cash you put in. And, on that, Alamo Dorado beats El Sauzal. <Present value of El Susie is higher. > Sure. What that is not what makes it more economic. El Sauzal is simply a bit larger. In short, BAY will produce twice as mush metals in $value has El Sauzal will in the first two years, and approximately, 10 more in the follwoing 3 years.