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

To: Elizabeth Andrews who wrote (2283)	3/8/2002 11:21:44 AM
From: Claude Cormier	Respond to of 39344

Hello Eliz, I am not enough of a geologist to explain the event at Alamo Dorado. What I know is that some deep drill holes cut 50 meters of 500-700 grams silver per ton.. and this will eventually lead somewhere. On surface, the main deposit could expand to the Northeast where another high grade starter pit could be found. Re cash flows. I agree it declines over year. But in terms of gold (since you compare this to La Choya) the first two years are indeed exceptional with possibly as much as 200,000-240,000 ounces of gold equivalent produced per year at a cash cost of $75.. then it goes to 125,000-150,000 at a cost of $160-$180... still good cash flows. This will be 2X better than Lachoya which turns out only 350,000 ounces if I am not mistaking. And who knows... down the road.. silver may improve or the high feeder zone may lead to something bigger...The North eastern zone could be a duplicate of the Main... In short, the IRR at Alamo Dorado is above 50%... it is not a figure coming out of thin air. <All tonnage and grade calculations have been by way of drill hole data and this should be checked by a meaningful bulk sample. > I don't think that the mining engineers think that this is true. I gues sthey know their job. <The other thing that's missing, in my view, is meaningful metallurgical data. > They have been testing for 24 months now with constantly improving results. Why do you suggest doing something that other miners rarely do. You know the type of ore they have. Mostly cerargyrite. This is a silver chloride that reacts very well to leaching and gives very good results (80-85% silver recoveries have been obtained on the high grade.) Again, I guess that the Mintec and Amec know their job. Amec are the same guy doing the feasibility for El Sauzal... so I guess they know their job. I'll say the samething I said to Zardoz, I think it is not a good idea to short BAY.