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Gold/Mining/Energy : Kensington Resources Ltd. (V.KRT) * Diamond in the rough! -- Ignore unavailable to you. Want to Upgrade?

To: Richard Cushnie who wrote (3079)	12/2/1998 1:20:00 PM
From: Chad Barrett	Read Replies (2) \| Respond to of 5206

<< I'm kinda confused here. How do they hope to prove it economical if they are only going to be pulling out 15 tons from each hole this drill season. At lease that is what DS said they would be pulling out. Why don't they just up the tonnage and get it over with already. >> I think these are actually quite easy questions to answer using straight logic. First, if the market thought that what they have so far was "economical" the stock would be doing much better! Personally, I believe that they could build a mine at FALC and make some money... but it would have to be a VERY large operation that would require incredible amounts of capital to get started... and considering that there are "better" opportunities out there for the other companies involved (Monopros, Cameco, Uranerz) it just isn't going to happen. Second, you ask what is the purpose of drilling 15 tons from each hole this season - and why does DS say this will hopefully show it is economical? My thinking of this is that they are going to drill "properly" this year and that they expect the results to increase significantly just based on the percentage of tracers they recovered in the last program! If I am correct they believe that the drilling process during the last program was actually not recovering most of the diamonds. Therefore, by drilling differently they expect to get "true" results that will increase the carat/tonne and $/tonne values! (I hope they are taking a nice solid and thick core this time!! Can you check this Buddy????) This would show much better economics for the pipes and renew interest in FALC's potential. Thirdly, you ask why they don't just up the tonnage and get it over with? Once again and easy answer! (although I agree with your sentiment! I say do the major bulk sample already and end this one way or the other!) The easy answer is simply that for KRT they can't afford it!!! If they were to try to raise that much cash right now they would have to do so at a very low share price and it would kill the company!! (if they needed just 4 million for their share of the bulk sample that would be 20 million shares at .20 with warrants attached - hence 40 million shares!) Also, the partners would have to agree to taking that step... I doubt they would yet. So, that explains the program for this year! What we are looking for is a noticeable improvement in the grade from the last results. If we get that, this play might come to life again.... otherwise... it will be the same old thing with KRT... Chad