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

To: The Vet who wrote (40208)	5/17/2007 3:32:56 AM
From: The Vet	Respond to of 78420

GRZ's numbers... Sure there is a discount for political risk, but compared with market discount of other Venezuelan miners (Crystallex, Hecla, GoldFields etc.) this is really overdoing it. GRZ will have a fully diluted share issue of 71 million shares assuming the over-allocations are taken up and all of the convertible is eventually redeemed as stock. There will be a little over $250 million USD in the bank ($3.52 a FD share) and GRZ needs another $400 million in debt to complete the mine, and a market cap is now $412 million (at $5.80 a FD share). Bankers are already lined up for over $430 of debt finance. If we exclude the cash in treasury, the metal in the ground is valued by the market at 412-250 or $162 million. That's a miniscule $15.58 per P&P ounce of gold, for a permitted mine under construction and allowing nothing for 1.3 billion pounds of copper or the exploration potential of Choco 5. Brisas will be producing 465,000 oz of gold and 60 million pounds of copper annually within 3 years. At present prices the estimated cash costs are negative after copper credits. The closer this mine gets to completion the cheaper the gold gets! Right now anything under $100 an ounce of P&P gold ($18 a FD share) is ridiculously cheap. In 2 years that figure will be 2.5 times higher ($45 a share) even if the POG doesn't gain a dollar in the interim.