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Gold/Mining/Energy : Canadian Diamond Play Cafi -- Ignore unavailable to you. Want to Upgrade?

To: james flannigan who wrote (2637)	3/13/2005 1:18:18 PM
From: WillP	Read Replies (1) \| Respond to of 16206

Will P, can't argue with your figures, But I just know you're going to. [grin] but all these calculations have no bering if Debeers is correct in their long term forecast of diamonds doubling in the next 6yrs according to Dr. Vandersande. There's one big if. By the rule of 72s, it requires an average price increase of 12 per cent annually. I also think that Aber would be interested in MPV at C$5.00 if they knew that the cash flow could support a C$ 15 to C$ 20 stock price in say 4 or 6 yrs. Maybe. If they "knew". Unfortunately, nobody knows. It would not be unreasonable for Aber to take up an equity position in MPV as we have seen with the likes of Newmont,Franco Nevada,and Tiffany on other projects. It might not be unreasonable, in your rosy diamond price scenario, but it would be out of character. Aber shed all of its mining projects, and as yet is showing no signs of interest in landing new ones. Meanwhile, it is moving willfully into the higher end of the diamond business. You list other companies that are showing interest in acquiring equity positions in mining companies. Newmont recently in Shore Gold, Franco Nevada is now part of Newmont, but its only other diamodn foray was with Aber. It sold that position at a fraction of the current share price. Tiffany also bought an equity position in Aber, as a part of the diamond purchase deal. It subsequently sold its share, just as the mine hit full production. Tiffany now is a Tahera player, with an equity and marketing stake. Did Newmont and Tiffany willfully pass by an opportunity to participate in Mountain Province? Or, is it still too soon? The one thing we must all keep in mind is if KL has US$3 billion soon to be US$6 billion of ore the mining costs will not change much,but the economics would put the mine in a world with Diavik in terms of IRR.I will go on record with John Kaiser the mine is far more valuable that most think. Again, you're making assumptions on the revenue end of things, while discounting the potential cost risks. That's what makes the current study so important. Let's see a real mine plan, complete with costs and anticipated revenues. Only then will the economics become clearer than mud. But, that's what speculation is all about. You lays your bets and takes your chances. Regards, WillP