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Gold/Mining/Energy : Yamana Resources INC. T- YRI -- Ignore unavailable to you. Want to Upgrade?

To: Greg W. Taylor who wrote (771)	11/18/1997 12:04:00 AM
From: Greg W. Taylor	Respond to of 2346

Re: Message Hi Greg. I'm noticing that the market is favoring mining stocks digging for copper and providing above average results. Such as WTC, GLR, V.CRN, & BWR. What does YRI have in the way of copper results, and will we (shareholders) ever have the chance of seeing YRI go 3 fold in 1 day like WTC did today on their drill results, which I believe they only have a 50% interest in. Greg do you know if this sell off is mostly retail or institutional? Also what info do you have on any insider buying or selling? A note to SI watchers YRI is trading @ 2x cash on hand, oppossed to their peers which are @ 4x avg eg QTR, GLR. REPLY: Sorry for the delay. Prospectus writing. Yamana's primary copper play is in the Northern Porphyry Copper Belt of Chile. I've said a lot about this project before so I'll not add much. The data room was opened today and, over the next two to three weeks we are having visits from interested parties, primarily major copper producers. These people have experience in copper; they've signed Confidentiality Agreements and statements of interest; and they've seen the preliminary data covering what we have and how we have tested it. To date, we've identified 10 positive drill targets, and we expect to have more within the next few weeks. These targets are the result of geochemical and geophysical testing of various sorts -- depending on conditions and location -- on our ten properties. (Yes, there are cases where we have more than one target on a property.) These properties were located using a geophysical technique called gravity, which measures the density of the rock underground. Yamana has discovered that gravity lows are associated with all of the major copper porphyries in the region. I visited Collahuasi and Cerro Colorado last week and they are amazing operations, currently producing or preparing to produce millions of tonnes of "pure" copper every year. As I've said before, this NPCB project could bring results within six to ten months that turn YRI on its head. This is because these porphyries are usually relatively well disseminated so that if you hit a long interception of good copper grade, you know you have a very good chance of having a major deposit. Therefore, it's the sort of place where a single drill hole can have a tremendous impact. Drilling is scheduled to start in February or March. We also have a relatively small though not fully deliniated red-bed oxide copper deposit at Neuquen, Argentina. A local company is currently testing the metallurgy as part of a pre-feasibility study. One of our targets in El Indio is a copper and copper-gold target. Palmer Mountain in Washington state is a copper target. The VMS exploration project in Tierra del Fuego Argentina and Chile include copper with zinc, lead, gold and silver. SELLING: The majority of selling is still retail. Some institutional sales have hurt us as well. One thing to remember about instituions: their paper losses are recorded and held up by their shareholders as real losses, even when they haven't sold them. Institutions may get back in later on, if they are convinced that a stock will go up and/or a sector that has fallen, will be seen as a positive again. On the other hand, for me or any other average shareholding individual, there are potential tax considerations -- especially if we've have made a lot of money on some other stocks -- but generally, we have the option of holding on to a stock, and if it goes down, we can wait for it to come back, so that any loss or profit is only recorded when we sell. INSIDER TRADING: Nothing significantly new. I've said before that I bought again at $1.65 and this is roughly the level that our VP Finance did so and the president's wife and my wife. None of us expected these levels. One more unfortunate note was that I was told that Bloomberg was late at announcing Insider Trades of last spring, when one of our very senior people sold 60,000 shares over four months. This happened, for the most part, pre-Busang, was for very personal reasons, and represented less than 10 percent of his holdings. He needed the cash. I got a couple of calls asking why he was selling and I had to point out the timing and explain the reason. I'm convinced there was some selling on that problem. FINALLY: As you point out, we are trading at about twice cash. This means that our 98 properties for 16 projects in six countries are valued at less than C$0.40/share. If we take the average of the market capitalization of several companies (I can give you the list I've used) with propjects in our key locals (Argentina, Chile, Indonesia, PNG) and if we add say $5 million for each of Washington state and Paraguay, where there are no real comparables, then Yamana's projects should be worth more than C$2.00/share, even in this depressed market. I know very, very few public companies that would say their shares are not undervalued but this would be silly if it weren't so sad and if so many people weren't being hurt by all of this. Cheers Greg