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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: Don Rohner who wrote (1147)	5/15/1998 2:27:00 PM
From: Richard Mazzarella	Read Replies (1) \| Respond to of 8010

Kitco has silver up almost a buck, can anyone confirm?

To: Don Rohner who wrote (1147)	5/15/1998 2:28:00 PM
From: Ray Hughes	Respond to of 8010

Hello Don: It all sounds so easy. Experience teaches us otherwise. Consider the minimum development timetable. 1. Drilling to prove resource to bankable and securities exchange standards - about 12 months. 2. Due diligence studies - 3 to 6 more months. Total ~ 18 months. 3. Financing and marketing the equity to fund capital expenditures - at least 6 months in a good market - in this market maybe no financing if the project isn't a barn burner. Total ~ 24 months. 4. Design, engineering, environmental base line data gathering - 6 months to 12 months running concurrent with item 3. 5. Construction phase - minimum 9 months, but more likely 12 - 15 months. 'Total ~39 months. 6. Start-up and debug - 3 to 6 months. Total ~45 months. In this case we look for, at best, roughly 4 years before we know the project is a commercial success which earns full net present value for the equity, i.e. shareholders. However, as in Monopoly, you often land on the wrong square - in no particular order the following befalls you: 1. Market crash - JUST A GEOLOGIST AGAIN. 2. You got endangered xxx - Greenpeaced!!!! SETBACK 3 YEARS AND $25 MILLION. 3. Opps, your ore don't leach so well - spend 12 months doing more column testing to get leach cycle worked out. Added crushing = higher operating costs. UNPROFITABLE MINE. 4. Ahead 5 spaces - your endangered bacteria leaches your ore. 5. You got montmorilonite clay that blinds off the pads - no leaching takes place. BACK TO SQUARE ONE. 6. Cycle over. You waited too long after metal price ran up to get Board of Dirs. on side. You knew all the while that it was a marginal, high cost project. But your consultants gave you the conclusions they knew you were looking for. But what the heck, your last mine made you a hero and your ego got the better of your intellect(?). Metal cycle over by the time you got that bunch of bozos (Directors) to move. Mine comes on stream just as metal price dumps. SHERRIFS SALE. 7. Skarn deposit!!! Highly irregular mineralization, tough to prove up reserve due to irregularity. But you're all a little hungry to get performance options in the money so you use ploygonal ore estimation technique that masks low reliability of ore grade estimate. Spend $50+ million putting mine into production. Halt production 9 months later. BANKRUPT. 8. A nasty Mining Securities Analyst visits your site - writes highly convincing SELL REPORT. The above are real. See today's Financial Post - Peggy's landed on SHERRIFS SALE. One of the hotter promotions going on today, backed by a famous team, is of a deposit that has been played at least four times over the past 20 years without going into production. The ideal timetable is seldom relevant. RH