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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: jackjc who wrote (24107)	11/1/2006 6:41:28 PM
From: koan	Read Replies (1) \| Respond to of 78419

Jack, I am trying to be realistic. Realistic, realistic. If I had told you 4 years ago copper would be at $3.50 and zinc at $2 today, and the LME almost devoid of zinc, what would you have said to me? BWR versus MMGG: BWR will be producing in excess of 300 million lbs of zinc next year and millions of pounds of copper and lead. Additionally BWR will produce in excess of 2 milllion oz of silver and 50,000 oz of gold. Say MMGG goes into production in 2011. Between now and 2011 how much cash will BWR earn? Then apply the near term value of money versus money 5 years downstream (compound interest). Now add to the above the likelyhood BWR will find even more ore and increase production during the next five years. MMGG will have some mighty big numbers to catch up too. Now lets look at demand: China: 200 million person cities, India, Russia, middle east (one trillion in construction right now, etc, etc. With the second industrial revolution at hand and a major paradigm shift in demand, zinc supply will have a hell of a tough time keeping up. The only way mine supply can keep up is by putting high cost zinc mines into production. Add to all of this environmental hysteria creating an environment where permitting has become very difficult and you have a recipe for very high zinc prices. Put $4 zinc into the equation above and then quantify BWR's worth? My point is that higher cost deposits are being valued many times below there actual worth, IMO, because everyone is assuming slightly higer prices will produce an excess of zinc and prices will come down. Just as it has for hundreds of years. I bleive that has changed forever ergo paradigm shift. My thesis is that we will shortly find out we will need to put high cost zinc mines (say $1 a pound) into production to meet demand. At that point you will see marginal deposits like RDV, PAX, YZN, etc put into produciton when it becomes clear prices are going to stay high?