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Politics : Gold and Silver Stocks and Related Commentary -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (17896)	8/31/2005 10:00:12 PM
From: seventh_son	Read Replies (2) \| Respond to of 18308

Tom, For me, it boils down to what average value per tonne they can get, and what tonnage there is. I never expected TGX to make most of their ruby money on a few super high value gems. What I think they will make money on is a fairly steady number of average quality gems (say, $500 US a carat) and a lot of lower quality gems (say, $30 US a carat), in such quantity that the value per tonne is still very high. That is what it looks like they have, and the value per tonne indications we have seen so far dwarf even the richest of diamond deposits if you make that comparison, or any gold deposit for that matter. Note that you have to go through a heck of a lot of tonnes in diamond deposits before you find any high quality multi-carat stones. Shore Gold, much in the news recently, projected $22.60 per tonne on their diamond deposits, and their market cap is close to $400 million US. TGX has had very conservative estimates that came from independent valuations on a small portion of what they so far processed from their bulk samples last year -- assuming that those appraised stones were the whole thing (and they were just a small portion of the total) they still got $570 per tonne for the sapphires without taking account up to 300% markup for no heat treatment, and $313 a tonne for the rubies. From this, not being extremely conservative, one could expect well over a $1000 a tonne for both deposits. Rohtert wrote in a 43-101 report that in good sales conditions with branding they might get $5000 a tonne wholesale on the rubies. I think he has lowered that estimate a bit recently, but it still looks very high. One might complain that the TGX rubies are not great because most sampled from last year are low commercial quality, but amongst that small sample there were still some high quality, world class pink sapphires. Now it looks like they may have even better stones -- and again in good quantity, not to mention their new hyper-high grade deposit at "The Tooth". So, I don't think that they need to find any ace in the hole. The ruby market is a billion dollar a year industry, pink sapphires perhaps another billion, and they have a market cap of only $10.7 million US -- looking like they can get a huge market share of that industry. Can you see why I am excited about the stock?