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Gold/Mining/Energy : Global Platinum & Gold (GPGI) -- Ignore unavailable to you. Want to Upgrade?

To: Tim Hall who wrote (6738)	7/16/1998 11:45:00 AM
From: Chuck Bleakney	Read Replies (1) \| Respond to of 14226

I've recently reviewed all of the statements in GPGI's BB and also the various other statements in this area... in review here's what I have. (Numbers rounded a little to make calculations clearer.) Present value of a ton of screened ore : $1000 Cost to process a ton of ore. $ 430 Ball mill cost per month. $60,000 They can currently process 5T per day with no improvements, 10T with some improvements to resin columns. Max for current ball mill is 15T per day.(??) Based upon an average 5 day work week (allows for downtime for repairs), then the run rates for 5, 10 and 15T per day would be 100, 200, and 300T per month. Based upon this I get a profit from operations of: 5T/day = minus $3,000 per month. (100k - 60k - 43k) 10t/day = $54,000 per month. (200k - 60k - 86k) 15T/day = $111,000 per month. (300k - 60k - 129k) Based upon this, they need to be at a run rate of at least 10T to make this part of the operation self supporting. The next question is what would be the expected costs to bring additional capacity online... assuming using this same model of 15T steps. If financing, additional manpower, infrastructure, etc all add up to net positive cash flow then bootstrapping this to a comfortable profit level should simply be a matter of execution... Eventually a more profitable step can be formulated with larger capacity per step. But as I see it they need to get up to a minimum sustained run rate of 100 tons per month and keep the pipeline to Sabin at a steady state or growing in flow as possible... A few months of this demonstrated will make all the difference in the world about market perceptions. Lets hope they've got it right this time... As Captain Picard was fond of saying; "Make it so"... The train hasn't left the station yet, but I'm expecting that "all aboard" pretty soon. Question is, should I buy a ticket before hand or pay cash when the conductor comes around ??? Chuck