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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: tommycanuck who wrote (19622)	3/4/2003 1:59:35 PM
From: Claude Cormier	Read Replies (1) \| Respond to of 206087

<Please fill me in on how the Canadian Royalty Trusts are replenishing their reserves...> Well, I have spend enough hours in studying those trusts in the past several weeks that It seems that they do replenish reserves. Most of them keep 20% of cash flows to develop lands. As well they use reasonable credit to expand their business. So, although you are right when you say that properties are more expensive, they are still acquiring reserves and production. <The trusts have had the luxury of buying cheap, quality reserves over the past few years but have little access to those anymore. > Yes to the first part. But as far as I can tell, they can still make good acquisitions. <The purchases now, their only visible means of adding to their reserves, are much smaller and of lesser quality than previously.> This is not the conclusion I reached after studying Advantage and Shiningbank. shiningbank.com advantageincome.com < They are mandated to spend little on the continued maintenance and development of the assets they have. > Where do you see that such is their mandate. On the contrary, they have to expand both reserves and production so to optimize current and long term distributions. <They have run the gamut...the easy money has been made and significant risk exists in my mind. > The older trusts are 15 years old and still growing with heafty distributions.

To: tommycanuck who wrote (19622)	3/4/2003 5:23:05 PM
From: Cogito Ergo Sum	Read Replies (1) \| Respond to of 206087

Hi tc, I really don't disagree with you here that there is a future problem brewing for O&G in general. I recall you brought a similar point up before and it is in the back of my mind. In responding to jim_p's post I was speaking from the premiss that the US trusts get an asset and deplete it, done deal whereas the CanRoys acquire as for example Acclaim's two recent acquisitions. If jim_p was being more general well yes, I missed the point. As to the issue of future replenishment for CanRoy's well, the WSB is mature , and the recent results out east are beginning to disappoint having an effect for example PGF.UN (Pengrowth) writing down reserves. There has been much discussion on the stockhouse trust board re: RLI's and their lack of significance since these CanRoy's do replenish. Well as your post infers, that is not insignificant and that is illogical thinking I'd agree. Nothing is buy and hold forever and we should all inform ourselves as best we can. If I'm coming across too bullish or I'm giving the impression that these trusts are riskless or an investment panacea, that is not my view, but they have been very good to me. I've been accumulating these since the last NG bubble and was fortunate to roll a lot of PM profits into these back in December going overweight. Quite a few folks have asked me about these trusts since we have now NG fever and I have pointed out many times that my ACB's are lower, to in some cases, ridiculously lower compared to current prices and I have done only some very selective buying recently. The trusts have had the luxury of buying cheap, quality reserves over the past few years but have little access to those anymore Can't argue that. The landscape is changing. thanks Kastel CCC