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

To: Rosie'sPaw who wrote (32046)	11/3/2004 7:46:48 PM
From: Claude Cormier	Read Replies (2) \| Respond to of 39344

Clark, I do not have an intelligent comment at this point in time. But I a believe this is not economic enough under $400. With higher gold and copper price, everything is possible.

To: Rosie'sPaw who wrote (32046)	11/3/2004 9:52:02 PM
From: seventh_son	Read Replies (3) \| Respond to of 39344

Clark, If you'd like my two cents, there used to be a map showing all the drillholes for the Pebble deposit on the Northern Dynasty website (not sure if it's still there but I had trouble finding it recently). I looked at this fairly carefully, and what it tells you is that there is a subset of the deposit that would appear likely be economic, which has about 6-8 million ounces of gold at about 1 g/t very close to the surface, and the rest is very spotty, lower grade, and deeper underground. A lot of drilling has to be done to convert the inferred to probable and proven, and I have my doubts about the vast majority of the area outside of the main concentration making it. So, if you value it as an 8 million ounce deposit, that might be more realistic. There are molybdenum credits that help economics a lot if you value them at current market prices, but you have to realize that if molybdenum is really going to stay at those prices there is at least one unopened molybdenum mine I know of currently priced so cheaply and it is doubtful that the market views such molybdenum prices as sustainable. Also, I don't have a favourable view of management's integrity, and there is a lot you have to take on trust with Pebble. Here's one secret you might not have heard about Pebble. There was much noise about the progress made in drilling in 2003, and an assertion that this drilling had vastly altered the understanding and economics of the deposit. Comparing the drill holes, in 2003 to earlier, however, my take on it was that there was no improvement that could be called dramatic. The change that increased the share price tenfold was the successful promotion and momentum that the stock gained. At the eight million ounce size for Pebble, Northern Dynasty is directly comparable to two other companies that I like, Gabriel and Gold Reserve, but for both of these you would have to stomach geopolitical risk that most squirm at -- what you buy with this risk is a lot more value and what I view as a better probable reward for the same level of real overall risk. Gabriel's Rosia Montana, which has projected capital costs a small fraction of what Pebble's would be, has 8 million ounces already probable and proven (Gabriels' share), is higher grade, and has a smaller market cap (about 220 million US vs something like 275 million US for Northern Dynasty). My own opinion is that Rosia Montana is more likely to go ahead than Northern Dynasty, but you have to have some patience and put up with melodramatic outburst from self-proclaimed crusaders who would claim that the impoverished residents of the mine area are not interested in having good jobs and brand new houses built for them rather than their current unemployment and old hovels. Gold Reserve's deposit is larger, probable and proven, almost ready for a mine to be built, and has better grade than Pebble (albeit relatively low), with potential capital costs probably less than half. It's market cap is 128 million US, less than half that of Northern Dynasty's. The problem with Gold Reserve, of course, is that it is in Venezuala, which is near the bottom of people's lists of geopolitically favourable areas, but I still think that its prospects are as good as Northern Dynasty's at a much cheaper price. I made a purchase of Northern Dynasty after Lawrence Roulston earlier this year made a very detailed and favourable recommendation of it, almost promising that it would be taken over very soon at multiples of the high price it was trading for at the start of the year. I think that he has honest biases and may have been sweet-talked a bit too much. Since that time I've concluded that the risks for the project being uneconomical are somewhat high, and the likelihood of it being taken over in the near future are not high. Versions of its environmental impact and risks are all over the map, and I don't know what to think there, but the one certainty is that it will involve an absolutely massive capital expenditure. Since I don't think that it will be taken over right away, I'm fearful that there will be a lot more dilution on the way (perhaps some of it involving dirt-cheap participation from management). Of course, a steady increases in the price of gold could make the stock price go way up, and Hunter-Dickenson are good at promoting the stock, but with higher gold prices, much higher stock prices would be inevitable for other stocks that I would feel more comfortable with, Desert Sun and Novagold to name a couple. Hope this helps... Regards, 7th Son