Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Western Copper Holdings Ltd. T.WTC -- Ignore unavailable to you. Want to Upgrade?

To: John Sladek who wrote (90)	12/19/1997 1:55:00 AM
From: John Sladek	Respond to of 401

"Considerable further drilling will be required in order to assess the total tonnage and grade of the deposit, but based on the above intercepts a very large massive sulfide deposit is indicated. Approximately 40 diamond drill holes, drilled on 100 meter centers, are planned for the San Nicolas deposit for the first half of 1998." The core samples (especially today's results) support the claim the deposit is very large - but big doesn't always mean that it is profitable to mine. The results from a single hole were promising, but were of poor grade. The results from the other holes could be quite different indeed, Defitely some will be better and some will be worse. --- One thing that I am wary of is estimates of what things like this are worth. Obviously if the assays come back and the grades are poor, then we will have a very good idea. But if some come back at say 10% zinc, what then. If the company says that until they drill 40 holes on 100m spacings they will not be able to assess the grade of the deposit, how can an "analyst" come up with a reliable number. The analyst has access to much less information than the company. Anyways, once the drilling is copmelted, a feasibility study must be done to see if the ore can be extracted profitably. This study would indicate the rate of return of the project, and would include an estimate of the net present value of future cash flows from the project. Only then is there an accurate indication of what this find is worth, and wether the rate of return justifies the investment. If the return was only 5% say, the copmany would be much better off putting its money in T-bills than in building the mine. --- There is a long time, and lots of money to be spent, between the current phase of the project and the first cash flow. In this time, the stock price will be all over the map. If the stock gets hyped way up on the latest news, or on the assay results, I will sell a chunk of my position. There might be opportunities to get back in later either at a lower price or at the same price but with lower risk (i.e., after a positive feasibility study). Regards, John Sladek