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

To: tyc:> who wrote (2463)	3/16/2002 2:42:18 PM
From: Elizabeth Andrews	Read Replies (1) \| Respond to of 39344

NGX is very interesting. The insiders are converting debt for shares at C$1.51 each. They are egghead types so they're likely working on some sort of cash flow model that is predicting a better return by owning the common shares. Also, they'll likely have some commodity price models built in that are very conservative. Knowing what we know about commodities there likely will be a time in the life of this deposit where commodity prices are relatively high and the mines costs are relatively fixed and predictable. Thus a huge balloon in free cash flow that will likely be paid out as a dividend. Notice how likely it is for me to use the word likely. NGX is likely a buy for the long term and you just have to pick your entry point. The company will likely have difficulty in attracting a following especially one with hot money or momentum traders. It's essentially a no growth story and boring. Metal prices are likely to change rather than the strategy of the insiders. Are the warrants going to trade publicly? Are the insiders likely to share the leverage with someone like you who has correctly spotted the opportunity? Likely not. It's a value play on a deposit that is likely big enough to produce through several metal cycles and provide a better return to the equity than the debt. Kinross is a different story altogether.