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Gold/Mining/Energy : 2007 Silicon Investor Stock Picking Contest - Metals -- Ignore unavailable to you. Want to Upgrade?

To: dara who wrote (240)	1/8/2007 7:08:23 AM
From: elizamaud	Read Replies (1) \| Respond to of 678

Dara, Based on this morning's anticipated NR on Bendigo Mining (attached), it looks as if my contest selection, in G&M terminology, is going to be a "dog" for 2007, rather than a "star" (unless of course the company is perhaps taken out in a takeover). I believe that Bendigo's Kangaroo Flats minesite, although in relative proximity to Melbourne, is well beyond the urban fringe, so the GBU Romanian analogy should not present an issue here. elizamaud " Bendigo Mining halts production January 8, 2007 - 6:59PM Victorian gold miner Bendigo Mining Ltd is suspending production and undergoing a major management reshuffle, as it prepares to post a loss for the year. Bendigo, which conceded it may have started production too early, may not restart production for up to two years or more and will instead concentrate on exploration in an attempt to shore up reserves. While chairman Peter McCarthy managed to retain his job, several senior managers, including chief executive Doug Buerger, have left the group, which will now be headed by former chief operating officer Rod Hanson. Bendigo was on Monday night set to release its December quarterly production statement, with its management team telling analysts that the group was expecting a writedown in the value of its assets, a significant loss for the year and was now totally revamping its strategy. "The rational response to a lack of reserves is to cease production and build reserves until they are sufficient to deliver reliable consistent production," Mr Hanson told a conference call for analysts. "The revised strategy will result in a hiatus in production the duration of which will depend on exploration success, but could range from several months...to beyond two years." The group plans to focus on shoring up reserves to two million ounces over next six to 24 months, which have fallen due to the lower than expected gold grades after misinterpretation of data. Shares in Bendigo have been in a trading halt since Friday, but its stock plummeted in October after it slashed its reserves estimate by a third. Its Victorian-based New Bendigo Project was thought to have reserves of 191,000 ounces of gold and while that figure will fall, the inferred resources of 11 million ounces in unchanged. Mr Hanson said the group will consider renting out some of its mining equipment in the short-term, but that it will reduce the size of its workforce from 260 to 100. The group currently has $66 million in cash, after a $50 million share placement in November, and expects its capital requirements to be about $35 million a year. Mr McCarthy said the latest developments meant there was some risk of the company becoming a takeover target."