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Gold/Mining/Energy : Pacific Rim Mining V.PFG -- Ignore unavailable to you. Want to Upgrade?

To: CIMA who wrote (8724)	2/21/1998 6:25:00 PM
From: Patrick Franchuk	Read Replies (2) \| Respond to of 14627

Canacord recommends pfg as a speculative buy. This is what they have to say. Feb 20, 1998 Pacific Rim Mining (PFG : TSE : $1.60 : Issued 20.0M; 24.0M f.d.). Among the juniors, one company focused on a silver project that we favour is Pacific Rim Mining. The Company's primary asset is the Diablillos, gold/silver, acid sulphate epithermal project located in Salta Province, Argentina. Exploration to date has focused on the Oculto zone where the most recent resource calculation identified 26.0M tonnes grading 0.34 g/t Au and 107 g/t Ag, for contained 260,000 ozs. Au and 91.0M ozs. Ag. Pacific Rim holds a 100% interest in the project with a 70% interest optioned to Barrick Gold. In order to earn its option, Barrick must spend US$10.5M by May 2000 and deliver a feasibility study and capital budget. Current exploration includes a 7,000 m drill program designed to infill on current resource estimates, as well as some step-out holes in areas which management of PFG believe will fall within an open-pit scenario. The above noted resource calculation is open to development both to strike and to depth, and we feel an opportunity to increase the silver content, in particular, by 30-50% is a real possibility. Initial calculations indicate the strip ratios may come in at around 3:1. The main deposit is roughly 150 m below surface, thus, in the above noted strip for an open pit prospect, it is estimated some 15.0M tonnes of overburden would have to be pre-stripped prior to mining. Metallurgically, this project has a unique advantage in that the silver present in the system exists in silver salts, thus it appears to be water soluble and could be very easily amenable to heap-leaching techniques. Initial metallurgical test work using bottle roll analysis on chip samples produced from RC drilling indicated 88% recovery for gold and 83% recovery for silver. We believe both recovery figures are likely understated and could be increased materially, silver in particular, with additional analysis. In addition to this prospect, PFG also holds adjoining ground in and around the Diablillos property as well as other concessions in Argentina. None of these other concessions, however, are much beyond the grassroots stage. The Company's other key assets include working capital, presently at about $11.0M or roughly $0.55/share, and an extremely strong and well respected management team lead by Catherine McLeod-Seltzer and CEO Tom Shrake. Shrake and his team have extensive geologic experience in the Americas, and are focused specifically on further identification of epithermal prospects in the Latin American theatre. We originally recommended PFG in our Scavenger's List Part I in November at $1.15/share. Since, the shares have rallied with silver prices to a high of $2.33/share in early February. The recent sell-off presents, we believe, another buying opportunity for speculative accounts seeking exposure to an unique silver play in a company that is well managed and aggressively pursuing additional prospects.