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Gold/Mining/Energy : Breakwater Resources (T.BWR) -- Ignore unavailable to you. Want to Upgrade?

To: Stephen O who wrote (549)	10/26/1998 6:48:00 PM
From: jack marshall	Read Replies (1) \| Respond to of 962

Thanks again. I enjoyed the statements from Billiton. An oversupply is forecast every year it seems but doesn't materialize. The only problem I have with the ILZSG is that they are short sighted. The following mines will be closing in Canada in the next three years--Polaris, Sullivan,Selbaie, Heathe Steele and Winston Lake. Combined these produced about 250,000 tonnes of zinc. Equally as important, Kidd Creek and Brunswick will be cutting back production due to reserve depletion and seismic activity. Noranda in fact is in big trouble when it comes to future zinc mine supply since most of what they got is short lived. Hence, Antamina. Additionally, there is a lot of "social mining" going on right now in Canada. For the life of me I can't figure out why Cambior still keeps its low grade money losers going. More interesting is the fact that there are very few greenfield projects waiting in the wings around the world. When the price rises, the only response likely will be a few tired old dogs like Faro trying to resurrect themselves like rotten in-laws who never go away. I predict this year that zinc mine production in Canada will be just over 1 MT but this falls away to less than 600,000 tonnes in five years. The only thing that can prevent this of course is a price rise to justify the new capital required for projects such as Kudz Ze Kayah. The picture is a little brighter in Australia with the new Century mine coming on line next year. This one is big. There is a lot of silica tied up with the zinc which the smelters don't like so it should be interesting to see where they place all the concentrate. Mt. Isa however, used to produce over 200,000T per year of zinc but their reserves are exhausted shortly. They gave the go ahead for George Fisher (I used to call it Hilton North when I worked there) but they are being less than honest about its production ramp up rate. You heard it here first. Broken Hill, the other grandaddy in Australia is showing strains as it too runs low on ore (a good 8-10 years left though). Five mines are closing in the next 3 years there which is essentially replaced by the Century Mine. The amazing thing about Australia also, is the lack of decent prospects that could be mine makers, Duguld River perhaps. Peru is the other bright spot for zinc mining. US production has risen due to the Red Dog expansion and reopening of Greens Creek. But, you know, when I do the exercise of tallying things up the Western worlds zinc mines will do good just to stay even with todays production rate. There are lots of tired old mines out there that are struggling to keep up. They were built with yesterdays dollars. When it comes time to build new ones they will need at least $0.60/lb. to justify the capital. This is of course, what I intend to exploit in the stock market when the time comes.