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

To: VAUGHN who wrote (990)	6/29/1998 2:55:00 PM
From: Tomato	Read Replies (2) \| Respond to of 2251

I seem to have read somewhere on SI that Randy Turner has said that WSP is an exploration company and has no intention of being the operator of a mine, so I'm not so sure that there will have to me any dilution, espeically if they sell their interest in the Snap Lake pty. outright to a major.

To: VAUGHN who wrote (990)	6/29/1998 9:45:00 PM
From: Walt	Respond to of 2251

Thanks Vaughn. Permiting: WSP planned a summer exploration program so they will have permits in place for their camp, drilling and trenching (I presume). If they want to do more then you ammend the permit which is no big deal. The two main stipulations for summer drilling are they usually want the drill moves done by helicopter and your drill cutting have to go into a sump you dig on land. As for dilution a company in WSPs position has several options. They have money in the bank, they will get money from the existing stock options if the price stays up and people exercise them, if the program is expanded Aber also has to kick in money to maintain their interest. They could run a program of several million dollars collect the data then shop the property around to the majors. Diamond deals are quite awesome compared to most mining deals. WSP could say OK if you want in you give us X number of dollars, and/or you buy Y number of WSP shares at a fixed price, you spend Z amount on exploration that earns you A% interest. If you want to earn B% you carry the project through to production. When production starts shortly after so do does income (theoretically) and WSP, Aber and the major split up the costs and the spoils. Or WSP could option Snap to a major in return for cash, work commitment etc and if it goes into production they get a Gross over riding royalty, a percentage of the diamonds. So a major works on snap and WSP goes on to explore their other ground. Or a major comes along and takes over WSP and/or Aber or buys them out. So WSP doesnt necessarily have to dilute themselves it depends on what kind of deal they could negotiate, what they want to keep and how much someone wants the property. Alot of variables. Each deal is different and would have different benifits to the shareholders. Personally if I were in WSPs shoes and seeing as I much prefer exploration to mining, I would do some more exploration at Snap to make it as attractive as possible, then I would farm it out to a major in return for a whack of cash or option payments and a good GOR (gross over riding royalty). With the money raised in this way I would carry on exploring the other claims and properties. Some companies and people like operating mines others just like finding them or finding good showings etc which may become mines. If it got to that stage the cash flow generated by a GOR on a diamond mine could give you lots of money for dividends and fund alot of exploration. Down the road who knows. So what you say is true, if WSP wanted to develop this as a mine themselves they would have to raise such a whack of money it would dilute the shares but there are also other ways to go and still profit. regards Walt