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Gold/Mining/Energy : Trump's 12 Diamond Picks, Discussions Limited -- Ignore unavailable to you. Want to Upgrade?

To: Walt who wrote (958)	6/26/1998 4:11:00 PM
From: VAUGHN	Read Replies (3) \| Respond to of 2251

Hello Walt So Lytton shipping to Lupin's plant, WSP shipping to Kennecott's Miramar plant, BHP shipping to Diamet's Kamloops lab and MPV shipping to DeBeers Farm don't really count then? Look Walt, I do not want to p...s in anyone's cornflakes. You have not seen me come on the WSP thread and throw water on everyone's excitement. I do not need the grief. Fix asked me my opinion and I answered him. I will never understand your need to take petty shots. What does SUF's misfortune at having 29 people using a corrupted government official to put them in a position to extort $$ resulting in the theft of 60% of SUF's discovery, have to do with WSP's lack of exploration success? I disagree with your suggestion that "WSP discovery shows that companies should be looking for dykes-fissures as much as they are for pipes" in the NWT. It's a waste of time and resources for a junior. What is does show is that WSP have little regard for shareholder equity. Looking for and developing such deposits is a game that only operators like you or juniors with a huge bank account and a small float can make a go of. You know better than most the political, engineering, economic, logistical and environmental obstacles facing any company putting in an all weather road in the NWT. WSP and SUF are about 20 to 30km apart by the crow so lets assume at least a 50km link around the lakes, bogs and plutons @ say $1.5 mil/km (slightly more than the unit cost DOT estimates to straighten the road to Rae). The currently proven or probable ore WSP have makes the economics of this option suspect. Regardless, you know as well as I, if there were a road between these two plays, both would have to have multiple Diamet grade pipes. Any play with only one Aber grade would have to be the one doing the shipping as it would not pay up here to develop a large processing plant for one pipe let alone a dyke system. Without the volume and longevity and high grade, the economics just are not there. What does BHP (Ekati) get 4 to 1 return on investment? They are spending $800 for their plant and Aber is talking $900 to 1 billion. Yes, subject to proving up 1-2 million tonnes of ore, WSP's dyke appears that it could support a nice little mine and it would make money. But it would have to be small scale and that simply will not reimburse existing WSP shareholder's, especially after WSP finishes diluting their equity at probably 8 or 10-1 to raise enough $$ to develop the mine and subsidize operations until it opens. As I have maintained, no multiple high grade pipes, no market enthusiasm. No enthusiasm, no low volume financing. These are not just the arrogant opinions of some know it all armchair expert Walt. In totally separate and unrelated conversations I have had with a number of experts, including Chris Jennings (SUF) and John Vasey (not exactly sure of the title but DeBeers Regional VP of Operations - Johannesburg) all have confirmed the basic thesis of what I have been saying. In fact JV as much as confirmed that DB have several remote nicely sized diamondiferous pipes up here, but because of their separation, the economics of development simply are not there for them. Now if DB's can not make remotely distributed pipes work, what expertise and financing does WSP bring to the table that makes them the exception? I am happy that all of you are seeing your shares take a nice little run and I honestly hope that you either make a buck or break even. I take no delight in anyone's misfortune no matter what their personality, but you of all people should know the reality of WSP's situation. A week or two from now, I suspect share prices will be back where they were and unless WSP can pull a rabbit out of a hat (multiple pipes out of Snap Lake) they will slide further by the fall. If WSP have property with pipe potential it is their new one up near Lytton, Cypango and Ekati, and if they have any brains, they will put the majority of their efforts into exploring that one. The current market is in a funk over lack of any junior's exploration success in a country where share holder's equity is safe, and commodity prices, but these are short-lived trends. While I am not excited about the current share prices of either SUF or DML, NAI or CYP I really am not too concerned. SUF will continue to recover as they have the assets and production to support their growth, and the others have another $13 million in drilling to conduct this year on a gabro the size of Norilsk. It is possible but unlikely that an ultramafic intrusion that size is barren. If that play were not prospective Teck would not be so heavily involved. It is simply a matter of time for both plays to recapture the market's attention again. Regards