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Gold/Mining/Energy : Naxos Resources (NAXOF) -- Ignore unavailable to you. Want to Upgrade?

To: Tom Frederick who wrote (8731)	1/30/1998 11:31:00 AM
From: BGM	Read Replies (1) \| Respond to of 20681

Grand Naxonian Award In the past we had a contest on the entry number of the big release that would start the stock price moving. One person tried several times and finally threw out 10,000 as a joke in desperation. You may want to raise that number in anticipation of still trying to win. Still waiting. Still confident Still frustrated BGM

To: Tom Frederick who wrote (8731)	1/30/1998 3:47:00 PM
From: carl	Read Replies (4) \| Respond to of 20681

Thought some might find this interesting. Stillwater (SWC), the biggest US producer of PT and PD, just announced results a day or so ago. biz.yahoo.com Per the report, they have 31.5 Million tons of material w/0.80 ozs./metal per ton (3.2 palladium to 1.0 platinum ratio) or 23.4 million ozs. of reserves. Presently producing 450,000 - 500,000 ounces of metal per year (2000 TPD plant), thus 40 years + on the life of the mine. Cash cost per oz averaged $174 for 1997 but the company said they expect them to drop to $140 - $160 next year. One post on the SI SWC board states that an analyst from SSB (Solomon Smith Barney) has a target price of $50 on them in 12 months. However, 2 analysts at First Call show earnings estimates of $.25 for FY 98after a loss this year. Stock presently is at about 19 7/8. I thought I'd try to compare their PT/PD numbers to NAXOS' PT/PD (all other metals can be viewed as a bonus!) to see what that might show. Assuming 1 oz each of PT and PD - (see August 28, 1997 release - #s below) Gold (oz/Ton) Platinum(oz/Ton) Palladium (oz/Ton) Gold Equivalent (Oz/Ton) Surface 5 acre #1 Disturbance area 0.779 1.259 1.378 3.135 and 2B tons of material, NAXOS would have 4 Billion ozs of reserves, or 170 times as much as SWC's 23.4 Million ozs. If NAXOS had a 20,000 TDP plant (10X bigger than SWC's present capacity), they could produce 12.5 times more PT/PD year ((1.0 oz per ton/.8oz per ton) = 1.25more metal per ton x 10 times more throughput = 12.5). A total of say, 5 Million ozs/yr. Then, based on Tom Frederick's recent post, I'm assuming a cash cost of, conservatively, $30/oz, or 20% of SWC's expected 98 costs of $140 to $160. If NAXOS produces 5 Million ozs. with an extra $110 to $130 dollars of profit per ozs., doesn't that make us about $550 - $650 Million more per year than SWC? Divided by, say, conservatively, 50 Million shares, we have earnings of $11 - $13 share or about 44 to 52 time more than SWC's projected $.25 in 98. Our mine life is much longer - 800 years. (4B ozs of reserves/5M ozs/yr = 800). But I'm not adding in for that. Our gold, etc. is very valuable, but I'm not adding in for that, either. I'm assuming PT/PD prices remain about the same (we aren't totally flooding the market in this scenario, are we?). So, obviously very roughly, aren't we 44 to 52 times more valuable than SWC (present price-almost $20) if we were to build this size plant? Doesn't that make NAXOS a potential $880 -1000 stock on PT/PD alone? What have I missed? Too optimistic? Cutting the amount of material in half doesn't change much, just the life of the mine and the valuation associated with . Cutting the recovery rate in half (.5 ozs each of PT and PD) still says we have a $440 - $500 stock and we've probably impacted the market price for these metals less than in the original assumption. Where are the holes in this line of thinking (besides leaving out the gold!)? If there aren't any, am I in the running for Naxonian of the Month?