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

To: Cogito Ergo Sum who wrote (12162)	5/11/2002 4:33:46 PM
From: Frank Pembleton	Read Replies (1) \| Respond to of 36161

Kastel... you said: -- I'm wondering -- why don't you read the annual report? You just got it in the mail, right?. -- Read through it and you'll get a scope of what was done and what was spent on that property in the Congo, let's not forget they were doing a bankable feasibility study before la merde hit the fan. Also... you should ask yourself, has there been a tremendous amount of mining exploration? Would they have a problem selling this property with facilities already built into place? BTW, NAV is about ten bucks a share - that's why ol' Frank fearlessly trades in the up direction. Regards, Frank P. Oh, before I take off for the afternoon... a nice little consolidation story: Canada Base-Metals Companies Ripe For Consolidation, DBRS Says (djones) VANCOUVER -(Dow Jones)- Canadian base-metals mining companies are increasingly having trouble earning reasonable returns, an industry review by Toronto-based Dominion Bond Rating Service concludes. As mid-sized players, Canadian companies could be in the next wave of a " massive rationalization" underway in the base-metals sector, which has already caused many companies to disappear, DBRS analysts David Smith and Esther M. Mui wrote. Canada has largely escaped the takeover trend but mid-sized Canadian companies such as Inco Ltd. (N), Noranda Inc. (NRD), Falconbridge Ltd. (T.FL) and Teck Cominco Ltd. (TEK.B) "may be vulnerable to an ownership change," they wrote in the review, titled "The Emergence of the Big 4 Mining Companies and The Decline of Canadian Mining." The big four of the title are Rio Tinto PLC (U.RTZ), Anglo American PLC ( U.AGL), BHP Billiton Ltd. (BHP) and Alcoa Inc. (AA). If the Canadian base-metal mining companies were to merge, their combined 2001 sales of $7.4 billion would still be smaller than any one of the big four global players, DBRS noted. "This shows how relatively small they are today individually, relative to what is happening in mining," the DBRS report states. The credit analysts said the Canadian firms are too concentrated in relatively few metals, and thus their earnings are highly volatile; they're too concentrated in relatively few countries; and although they have cost- competitive mines with long lives, the Canadian companies didn't benefit from the "massive" currency devaluation in South Africa, and to a lesser extent Australia, that helped the bigger international companies. Canadian base-metals companies could merge with each other or with other mid- tier producers, or they could be bought by one of the big four, DBRS predicted. "Australia has already faced this issue, and there are few mid-sized Australian mining companies left," DBRS said. "Canada could be the next focus of consolidation, possibly starting with Noranda/Falconbridge," the bond-rating service said. Noranda owns 57% of Falconbridge and has been slowly increasing its stake in recent years. The conclusion about consolidation doesn't pertain to Alcan Inc. (AL), because the Montreal-based aluminum company has the size and global presence to remain number two in that business behind Alcoa, according to DBRS. Canada is losing its market clout in mining to Australia, Chile and Peru, the authors also said. Canada can't compete with the low-cost copper mines of Chile and Peru, while in nickel, both Falconbridge and Inco are proceeding with new nickel projects in New Caledonia, they pointed out. Large Canadian mines, such as Sullivan or Polaris (both owned by Teck Cominco), are closed or near the end of their lives, the review noted. The Sullivan zinc-lead mine in British Columbia closed last year and the Polaris mine in Nunavut is scheduled to close later this year. "While there are a few exceptions in the diamond area, the long-term trend in Canadian mining has been downward," the review said. -Lynne Olver, Dow Jones Newswires; 604-669-1595; lynne.olver@dowjones.com (This story was originally published by Dow Jones Newswires) Copyright (c) 2002 Dow Jones & Company, Inc. All Rights Reserved