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Gold/Mining/Energy : Clifton Mining (CFB-Alberta)-Silver Play -- Ignore unavailable to you. Want to Upgrade?

To: Dan P who wrote (278)	2/14/1998 8:33:00 AM
From: David Luton	Respond to of 653

Dan: I like your conservative style because it, compared to some of the promoter bandits elsewhere on the web attracted me to this site in the first place. However I believe you under estimate both your knowledge and capability in this case. My apologies in advance for a long response as this is a complicated issue. I will only consider the relevant Clifton issues as this is a Clifton thread. If we use an analogy from real life the basic question is whether we are better off marrying a girl (Clifton) now or waiting for the attractions of her younger sister (American Consolidated Mining Company.) We know we are going to marry within the family, the basic question is which is the best choice now before the market price gets too high. The key to realize is that if you expect to wait for a certain time frame (say 12 months)to realize your investment objectives with Clifton, at least double it with ACMG. Because of the number of upcoming potential synergies between the two companies I am concerned that the controlling shareholders of both (The Moellers) will merge the two companies and not give us the chance to examine the respective merits of each. Your update response makes it clear. The next major production issue is the partially completed big mill. For a real life example of what I am talking about see another silver thread (United Keno Hill UKH - Toronto) and their upcoming merger with (NDU Resources - NDU Vancouver). Like a marriage, both parties bring some benefits to the union and the whole is greater then the sum of the parts. What we have to do is to analyze the synergies each brings to the union so that the likely market price relationships can be determined in a relationship between the two. We buy the undervalued partner. Dan: If you feel unqualified I even feel less but let me give it a shot. I don't think anyone has the answer but maybe collectively we can work it out. It has been mentioned on several posts the following interrelationships between ACMG/Clifton. 1) It was Claude Cormier's post of early January (See # 201) on this thread that got me to thinking about this issue. In it he mentioned that he believes ACMG holds 1,300,000 shares of Clifton. This is over 5% of the total issued. Dan: Do you know what is the true number and if there are any other Clifton warrants or rights held by ACMG? 2) Their property is adjacent to Clifton. Dan over to you, What do you think are the odds that the Clifton propety veins extend into ACMG's site? (There is a certain valley up in Idaho where a lot of the present silver blue chips got established by just the same situation.) Continued on next post

To: Dan P who wrote (278)	2/14/1998 9:00:00 AM
From: David Luton	Read Replies (1) \| Respond to of 653

Dan: Post # 2 Continued from previous post 3) I understand that ACMG has a net profit interest in the partially completed mill (60%??) that Clifton will use for its next phase of expansion. This is capped at a $1,300,000 total payout. 4) ACMG has a net smelter royalty of 2.5% on all of Clifton's production (Similar to the Euro or FrancoNevada in several gold properties. Based on Claude Cormier's analysis (Post 234) with the yield modified up to $100.00 ton because of higher silver prices, and your updates, once the larger mill starts up we get the following chart (PER DAY) Clifton ACMG. 1) NSR @ 1000/tons day $100,000 $2,500 $100/ton 2) Estimated Gross $60,000 $3,000 profit daily prorata share value (5%) (In post 234 Claude Cormier has assumed costs of $40/ton for Clifton for mining and milling) ______ Total daily profit ACMG $5,000 ACMG will also receive $1,300,000 for the Mill, and apparently has an unused $2,800,000 tax loss. At present TRADING PRICES in 1998 ACMG's market cap is only $2,000,000. Dan: Where am I wrong. My conclusion is that at present ACMG stock prices the Moellers have a huge incentive to buy ACMG and save Clifton shareholders a lot of money. Dave