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Gold/Mining/Energy : GMD RESOURCE -- Ignore unavailable to you. Want to Upgrade?

To: Richnorth who wrote (434)	11/16/1997 7:16:00 PM
From: Dave R. Webb	Respond to of 1030

Before we get too carried away with estimates, which are a valid way of evaluating a property and hence a stock, some points should be made. First, and not the least, there is no current reserve estimate released, so we're speculating here (not investing). I believe the numbers may justify, or maybe surpass your expectations, but that too is just an educated guess. Second, mines are designed to move volumes, and sometimes tonnes of rock (not ounces of gold). The cost per ounce is a function of cost per tonne (which can be engineered) and grade (which is a function of the deposit and cannot be engineered with ease). Third, the results released to date reveal lots of moderate to low-grade intercepts, and quite a few high-grade intercepts. This should tell people that there is some latitude in deciding what the grade of the deposit will be (by varying the cut-offs, changing the mine plan, etc.). Its healthy to view all of these attributes of the deposit/company, and more. I don't think one should get too carried away or too detailed with cost/ounce or market values yet. The direction the company is going, and the development of the property is paramount. The current price of gold affects the attitude of speculators, not the longer term economics of the project. GMD will not be selling any gold into today's market. Dave

To: Richnorth who wrote (434)	11/17/1997 12:58:00 PM
From: Rick Seavey	Read Replies (1) \| Respond to of 1030

The figures that I used to illustrate my point have no basis in realty at all. Although they are just out of the air numbers, I hope that my message was successfully made. These being: 1. GMD is a well run company. 2. They have at least one property that by all current indications will one day be economically profitable. 3. The exact degree of that profitablity is, as yet, unknown. 4. The reason that it is unknown hinges on two factors. The first is that more exploratory work needs to be done to define the boundaries and minerology of the property. This will take, by my estimate, a minimum of 2 years and maybe more to determine. The second involves the price of gold because without an increase, it will stay in the ground where it is regardless of drilling results. 5. The other properties are, at this point, window dressing but the diamond claims add a potentiality that I like especially with the demise of gold. 6. The current share price of GMD may or may not be undervalued at the present time depending on how you value the company's potential. And let's be honest, that is all the company has at the moment. We can talk about tonnage and ounces per ton and cutoff grades and annual gold production etc. It is a fun discussion but Mr Webb is right. It is far too early for that. And I apologize for not identifying the figures that I used in my earlier post as fictious ones. But when everything is thrown into the equation, I like what I see. I like the risk-reward potential. And I like the management of the company. But it isn't going to happen overnight. What I have said above, I am sure is no great revelation to the investment community. From the investment standpoint, there are two ways (at least) of looking at companies like this. The first strategy is to accumulate shares while the shares are low on the gamble that the price of gold will recover some day. The second is to wait until that price does recover and then buy the shares at a higher price. I strongly believe that the latter strategy is in vogue right now at least until we know how low the price of gold is going. Thanks for the links to the other sites. These are super interesting points that I had never thought of that may dictate the price of gold over the next couple of years. However, I had trouble trying to figure out what the bottom line would be. How did you interpret what the outcome of all this will be as it affects gold prices?