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Gold/Mining/Energy : Armada Gold 10 Million oz of Gold & 1 billion lb of Cu ! -- Ignore unavailable to you. Want to Upgrade?

To: stockman who wrote (403)	3/16/1998 11:17:00 AM
From: Ross Orr	Read Replies (3) \| Respond to of 552

I thought I would inform this thread that I have been reretained as IR for Armada. The Ivanhoe group is no longer involved and we will do our best to keep the markets informed of the company's progress. The cash position of AAU is weak right now but the company is looking to do a financing to allow them time to assess their options. Yes, the company has 100 million shares outstanding but in terms of market cap. a valuation of $28 million Cdn is a joke for assets that are numbered in the billions of dollars. The market knows they have no money and has issued a death cerificate in advance of expiration. The company does not need a lot of money to operate. Mongolia is basically a self funding operation and the feasibility study, which had been burning cash at $1.0 million per month, is over. Here is an exercise that I have gone through in the past to put things into perspective. This involves AAU producing 50 million pounds of copper after a successful feasibility study produced by Marubeni calls for the enlargement of the SXEW plant at Erdmin. 1. Assume a copper price of 80 cents per pound. 2. Production costs and royalty of 30 cents per pound 3. An annual $10 million principal and interest payment on the $50 million needed to build the plant. 4. There are no taxes paid to the Mongolian government due to the tax free holiday. 5. AAU has a 50% interest in plant 5. Therefore: 80 - 30 = 50 cents gross. 50 cents X 50 million pounds equals $25 million US Subtract $10 million US for (3) above leaves a net of $15 million 50% 0f $15 mill is $7.5 mill US or $10.5 Cdn. or 10.5 cents per share in after tax earnings. Show me a copper company that trades at 2.5 times earnings which also happens to have 8 million ounces in the ground. Ross Orr