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

To: Herb Duncan who wrote (966)	2/26/1998 11:04:00 PM
From: Greg W. Taylor	Read Replies (2) \| Respond to of 2346

Anyone interested: In the interests of open discussion and, I hope, some clarity for those not aware, I thought I'd stick my nose in with a couple of comments about today's falling share price. I found out late in the day that Bob Bishop put out a knock on Yamana overnight. Essentially, what he said in a single paragraph statement as part of a six-page report, was: a)"Does a triple in the stock price provide(s) an opportunity to exit?" COMMENT: Profit-taking? Perhaps. Exit? Read on. b) He had a consultant (Doug Hurst) spend some time examining our information and Doug is "of the view that, while the grades are quite interesting, the tonnage implications of the drilling done to date are modest and the costs in the area will be high." He said that he was not convinced of "the size potential" or that it is "a major discovery" and so is "inclined to give Yamana a pass." COMMENT: A few drill holes, some concentrated in a small area, are nowhere near enough to generate any "tonnage implications" in this sort of epithermal area, with this sort of geology, in zones of these dimensions (so far). The objective of this first pass drilling was first, to find out what we have and then, to begin to find out where it is. Forget about the fact that we have not yet penetrated to the sulfide zone beneath the gossan. The South ridge remains open at depth, and at both ends... we have not yet drilled deep and we have not reached the "ends". So far, we have established a MINIMUM length of 350 meters, a MINIMUM depth of about 25 - 30 meters and a MINUMUM width... we can see that this extends for at least 1.2 km then becomes soil covered and there is another gossan 2 km along strike which runs for at least another 600 meters and then goes under the soil again. The mineralized zone could be small. That's true. The mineralized zone could also be several kilometers long. What we have so far is a very rich, high-grade silver oxide zone, with significant lead, gold and other minerals. It's as unreasonable to say there is insufficient tonnage as it would be for me to say there are billions of tonnes. We don't know yet and we were not trying to find out. Echo the above comments concerning costs except to add that, as well as the unknowns we have, we disagree because of the grades we're looking at, the proximity to surface (so far), the main roads nearby, the developing experience of Cerro Vanguardia, developing infrastructures underway in the area etc. c) Bob added to this skepticism about any positive impact on our value of Indonesia: "That's a comment on the country, not on the property." Fair comment. That's why we have no current plans to drill there until things clear up in Indonesia. We've not received value for Indonesia for almost a year, we don't expect a change in the market's evaluation of the area for a while longer. The other criticism that's come to the fore has come from Bob's friend, Rick Rule. I've noted this before so I won't comment beyond saying that I have a lot of respect for Bob and, for that matter, Doug Hurst. I / We just happen to strongly disagree with his/their conclusions. As does Brian Christie of HSBC James Capel. As do a number of other letter writers, analysts and other geologists. There's an old saw in this business: "What do you have when there are two geologists in the same room who agree?" "Get rid of one because you've obviously got one too many." Of course,Bob and Rick might be right. It's a good strategy in the current market. But the proof is ahead of us. Results will be coming in the coming days and weeks. I hope this helps all of us. Greg.