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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: BSGrinder who wrote (10434)	4/3/2002 9:48:26 PM
From: Frank Pembleton	Respond to of 36161

BSG -- "exploration plays" -- I'd be careful here - again the subject of risk plays deeply with these exploration plays. You'd have to ask yourself what would move first when PGM stocks are in favour? Would it be "exploration plays" or would it be a known company with established reserves, ongoing production and a seasoned management team? The risk of dilution is always present with mining companies, mine are a depleting asset and exploration isn't cheap. Look at their current production, look to see if they have positive cash flow and look to see if their balance sheet isn't over levered. Personally, I look for companies with debt to equity ratios of between 40 to 60 percent - these babies rock the best when the bull smiles. So anyway… Good Luck! Regards Frank P.

To: BSGrinder who wrote (10434)	4/4/2002 12:21:06 AM
From: isopatch	Respond to of 36161

BS. A good, thoughtful post. . Our exchange on SWC is a good example of how differing points of view can be expressed in a spirit of good fellowship. Good luck with whatever decision you decide to make. Isopatch

To: BSGrinder who wrote (10434)	4/4/2002 1:31:11 PM
From: russwinter	Respond to of 36161

<keeps coming to the markets for capital> Yes, just enough to be aggravating. SWC little problem on that front sure seems to make it ripe for another stock swap acquisition by a major, especially one that has a 10 plus cash flow multiple or more currency value to swap with. A low-mid 20's price wouldn't be a surprise and the vultures have to swirling overhead eyeing this IMO. Looks like it's only trading at about 7 times cash flow/enterprise value: (market cap plus debt & net working capital) if they produce 740,000 oz at an average price realized of $450. Even if reserves and resources are restated downward, it is still a tasty asset although it's largely Pd (kind of a concern), not Pt. But it's not a huge takeover target and a larger player might bring in the ability and resources to finally get it cranking properly. I think SWC risk-reward is pretty favorable at 15 bucks and a 50% takeover payoff this year could be in the cards. I've taken a modest position here, and will average down on any more bad news.