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Gold/Mining/Energy : Breakwater Resources (T.BWR) -- Ignore unavailable to you. Want to Upgrade?

To: dean poets who wrote (902)	4/24/2002 1:35:36 PM
From: dean poets	Respond to of 962

"Summary Production in the first quarter from Breakwater's five operating mines is ahead of the 2002 yearly target of 483 million pounds of zinc. Total cash costs were U.S.$0.31 per pound of payable zinc during the first three months of 2002 compared with the Company's forecasted annual total cash costs of U.S.$0.35 as published in the Company's annual report. Breakwater's financial results are largely dependent on the price of zinc. For the first quarter of 2002 realized prices averaged U.S.$0.37 per pound of zinc (U.S.$813 per tonne) which was better than the U.S.$0.35 per pound (U.S.$780 per tonne) that the Company had forecast for the period. The sensitivity to earnings and cash flow to changes in the zinc price on an annualized basis is $5.4 million per U.S.$0.01 per pound based on forecasted production. In addition, smelter treatment charges were approximately U.S.$12 below the company's forecast for the year and the shipping rates were lower than forecast. Based on production estimates for 2002 a U.S.$10/tonne change in the treatment charge impacts the earnings and cash flow by $6.128 million. It is expected that the financial results for the Company will be released after the market's close on Thursday, May 2, 2002." The way I see it, is that Breakwater's potential net earnings for the quarter might surprise a lot of analysts. According to the summary, they will earn somewhere around $30 million for the quarter. Using calculations of roughly 500 million tonnes, and earning 6 cents a tonne. BWR has brought down operating costs dramatically for the quarter. If Zinc prices continue rising, it won't be long till Bwr is earning $100 million a quarter. Dean

To: dean poets who wrote (902)	4/25/2002 2:05:14 AM
From: Harry K	Read Replies (1) \| Respond to of 962

BWR's chart also shows the stock's decline has slowly ground to a halt - and has been moving sideways at $0.225 since April 19th. Now is probably a good time to tip-toe in a bit - perhaps holding back until their AGM on May 2nd, is it? when I expect them to announce some kind of share consolidation - maybe as much as 1:20. THEN, wait a bit for the see-sawing to calm down, before getting in the rest of the way - especially if zinc prices continue to climb. And they haven't looked at the rising price of gold recently too much, which is an added impetus to get this stock moving. My only concern at this time is the continually rising inventory on the LME - it was up another 8,700 tons again at the afternoon close on the LME, leading me to wonder how the zinc price can keep climbing in the face of this situation.