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

To: Greg W. Taylor who wrote (1384)	6/25/1998 3:51:00 PM
From: Greg W. Taylor	Read Replies (2) \| Respond to of 2346

I was distracted while I was writing the above but I wanted to make a couple of more points FYI. As a very broad calculation, DDH in the area will likely cost approximately US$125-150 / meter, and normal good progress in the area should be about 40 to 60 meters per drill shift. RC drilling, using our own rig and crew goes 2-3 times as fast -- not counting mob and demob -- and costs about one-fifth as much. A drill program at Lejano involving one RC and one DDH drill would probably go for 7,000 to 9,000 meters over the 8-9 month drill season. There would also need to be some metallurgy work, as well as further surveys including some more geophysics, photos and mapping surveys. To answer your question more generally, while you could conceivably spend as much as you wanted, were money no object, it would be tough to spend more than about US$5 million efficiently. For example, if you have too many drills going at the same time, you can quickly get ahead of your assay results. You also have to budget for normal maintenance, as well as break-downs. We have to make the decision whether to pay extra to improve turn-around time (2-3 weeks versus 3-5 days costs about 50% more) and whether we want to re-activate the independently operated lab we have at our Bema ranch. Also, you normally need time to digest results as they come in.) There are several variables including the rate of "success", the rate of drilling, the availability of equipment and crews, as well as the normal exploration unknowns. Obviously, given a high rate and level of success, combined with the "perfect" ore body, we could spend US$5-6 million or more. Realistically though, we could do very nicely with half of that. Greg