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Gold/Mining/Energy : ASHTON MINING OF CANADA (ACA) -- Ignore unavailable to you. Want to Upgrade?

To: Jesse who wrote (2851)	11/12/1997 11:21:00 PM
From: Phoenix	Read Replies (2) \| Respond to of 7966

Jesse; I don't want to say too much at this point because I need to do more research and I want to talk to the company to clear up a few questions I have. However I do think the market was expecting a higher grade and therefore was unclear on how to react. The 36 cpht number is at the marginal level based on worldwide averages. But the development costs should be low (easy access, at surface, politically stable). Therefore we may be on our way to having a mine at K14. Ashton is playing it conservative to the extreme. The most significant statement in the press release is deliberately ambiguous. ie ". . . K14 contains a population of diamonds of commercial size". Does this mean that there are "individual diamonds of commercial size" or "that the population of those diamonds is of commercilal size". Obviously the latter would be of greater significance. Also the fact that they made the release on holiday and kept their office closed would suggest a most conservative and non-promotional approach. It appears they are giving us the "bear" minimum and trying not to attract attention. I read this as a long term positive. Bottom line as I understand it today; - mini-bulk from one pipe that has potentially economic grades; - suggestion that most are "colourless". ("many are coloursless and there are some coloured stones as well") - $ per carat still unknown - but colourless is positive - (no mention of inclusions). - large tonnage in this pipe and cheap to develop. - more mini-bulk analysis about to come from "lessor" pipes; that could bring surprizes - more micro analysis to come from new pipes. - minibulk to come from best pipe to date a few months away in a turbulent market (there will be buying opportunities) - about a hundred pipes left to drill (at least) - analysts are bullish on this play - the big board is getting bearish - we may see Kaiser's "risk shift bubble" in the first quarter of 98. My bottom line: I actually want to price to go down short term so I can build a larger position for the long term. I guess I said more that I intended. Still very long. P.