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Gold/Mining/Energy : Campbell Resources (CCH.TO / CBLRF.OB) -- Ignore unavailable to you. Want to Upgrade?

To: BensonInvestor who wrote (4)	9/18/2006 11:19:06 PM
From: BensonInvestor	Respond to of 91

More Due Dilgence on Campbell (from Prospectus) - Part II A SiliconInvestor reader saw my posts, found me on another message board, and asked several specific questions. Here was my reply: ----------------------------------------------------- Baystock, You had one more question: 4) Also what is expected addition share dilution over the next two years so that these projections can be met ? Answer: I don’t expect any further dilution at all. But that’s always a risk, with any company. Of particular importance is the fact that so many warrants will be out there. I estimate about 100 million warrants. Each has an exercise price of $0.15. So if they get exercised, and I think they will, Campbell will have another $15 million cash in their treasury. So we have a hugely cash flow positive operation, plus funds from warrants, plus future royalty income (see below). All near term development costs have sources of funds. Remember that Nuinsco will be paying for part of the Corner Bay development. Campbell may also start seeing cash flow from the three royalties they have arranged. They will now have royalties as follows: - Royalty on the Discovery property with Strateco - Royalty on the Eastman Mine with Eastman Resources (ER.TO) - Partial ownership of the Pitt Gold property, that will be developed by Normabec (NMB.V) I am guessing that the Eastmain royalty will be the quickest to turn into an actual cash flow. The Eastmain mine is a former producing mine, and it sound like Eastmain Resources wants to restart that mine fairly soon. (The recent deals with Strateco and Eastmain will also be resulting in cash payments to Campbell fairly soon).

To: BensonInvestor who wrote (4)	9/30/2006 1:49:01 AM
From: baystock	Read Replies (1) \| Respond to of 91

>I have been posting, for a long time, that I believe Campbell will be earning between $30 and $80 million Canadian dollars by mid-2007. That will be the annual rate they will hit by mid-2007, so total earnings for 2007 could be slightly lower. That will give Campbell a forward PE ratio of somewhere between 1 and 3.< Benson, supposing for a moment that I was to accept your PE ratio range of 1-3 (which I don't, since you simply asserted it without showing your assumptions and calculations). While this may be somewhat cheap, my preference would be to find undervalued pure gold/silver plays. There is a high risk that base metals have peaked for some time. Whereas gold and silver still have a ways to go. Additionally, the market awards much higher multiples for the cash flow from a pure gold/silver play than for a copper play. But even if copper has not peaked, why should I invest in a copper producer like Campbell with a forward PE ratio of between 1 and 3, when I can find a pure gold producer with a similar forward PE ratio ?