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

To: tyc:> who wrote (3003)	4/10/2002 7:04:09 PM
From: Jim Steel	Read Replies (2) \| Respond to of 39344

Hi Tyke: No, it means you calculate the copper in gold terms using the ratio between the current gold price and the current copper price. Say gold is $300 and copper is 71c- then 422.5 lbs of copper is 'equivalent' to 1 oz of gold. Then your 84MM lbs of copper is 'equivalent in value' to 198,800 ounces of gold. You can sometimes use gold equivalence to equate reserves or resources, but not production (different recovery processes; different operating cost inputs; different futures curves...)Also, casting non-gold commodity value in gold terms is misleading since you'll never get a gold multiple in the valuation comparatives for it. Folks do try, however. Jim Steel Mining Insights Inc.

To: tyc:> who wrote (3003)	4/10/2002 7:49:53 PM
From: Elizabeth Andrews	Read Replies (1) \| Respond to of 39344

The prospectus just published says that production in 2002 is estimated at 251,607 oz Au and 79.2 million pounds of Cu. You have to introduce the price of each commodity to figure the equivalent. The amount produced already accounts for recoveries. So at $300 gold and 80 cent copper it takes 375 lbs of copper to equal one oz of recovered gold. The cash cost net of copper credits is $130 per ounce and the NSR is going to be between $155 and $165 per ounce. So at $300 gold the cash flow after pfd share dividends and admin should be about US$26 million or US$0.37 per share. If my math is correct this is the cheapest producing copper-gold mine in North America. It has size and long life. What's missing?