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

To: Julian Augustus who wrote (31982)	11/1/2004 10:26:40 AM
From: seventh_son	Read Replies (1) \| Respond to of 39344

Regarding DSM, here are some highlights of the Jacobina Mine, their main asset, as taken from desertsunmining.com. "HIGHLIGHTS Mines to Produce 102,500 oz. Gold per year at Cash Cost of US$189 per oz beginning in 2005 Capital Cost (net of preproduction cash flow) US$30.7 million Recovered gold including pre-production estimated at 731,000 oz. over 7 year mine life After Tax Internal Rate of Return of 39.2% at US$350/oz Separate Preliminary Assessment by SRK on Inferred Mineral Resources indicates good potential for extending mine life by 11 years" Some other positives about DSM - they have some high profile management, including a recent appointment of Bruce Humphrey, former VP and Chief Operational Officer of Goldcorp, and a former Eldorado Brazil mine manager overseeing the mine development, forget the name, but very well respected for his work at Eldorado - the company feels that when they move to producer status, expected early next year, the market will begin to analyze and compare them based on a different set of metrics and share price should increase - the company also owns a long stip of land known as the "Bahia Gold Belt" for future exploration, although most efforts recently have been concentrated on the area close to the Jacobina mining infrastructure that they have taken over and refurbished. Just as a point of interest, the Bahia gold belt runs close to the NE coast of Brazil, and in ancient times the tectonic plates of South America and Africa fit together like a puzzle piece in the supercontinent Pangaea with Bahia directly adjacent to prime African gold regions in Ghana and Burkino Faso. DSM is not a big player, but also do not suffer the risks inherent in most of the small-medium sized mining players since they are fully permitted and have financed and refurbished an existing mine and mill at a fairly low cost. Main risks will be the price of gold and the exchange rate of the Brazilian Real. Since the gold deposit is marginal but currently economic grade and the stock is priced as such, there is good leverage to the price of gold if it rises significantly. DSM is perhaps on the low end of the size spectrum for what a mining major might consider as a takeover target, although it might make a good prospect for intermediate producers already in Brazil, namely Eldorado and Yamana.