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

To: Tomato who wrote (1829)	1/3/1999 12:08:00 AM
From: teevee	Respond to of 2251

Hi Tomato, You asked some mighty big questions but I will try. 1. Look at the pre-feasibilty numbers reported and calculate a 25% return. Alternately and very simply, assuming no cost of capital, operating and capital costs of $127.00/tonne, 50% taxes-a 25% return would require about $190.00/tonne. This is about my personal safety limit. 2. Assuming ABC mining company had the same number of shares outstanding, but twice the tonnage, and the possible extraction rates were the same, the share value should be the same in my mind once you exceed the NPV of the ore. This is very simplistic, as there are many many factors, such as whether in a takeover for example, the deal is cash, or stock, and whether it is based on return on purchase price or market multiples, which has many times in the past been reflected in prices that many people, including me have had a hard time understanding (market multiples for high tech stocks is even wilder than for resource stocks). Other factors include whether the company does as farmout or is the subject of a hostile takeover between at least two suitors. Farmouts for example usually cause a junior's share price to go into the toilet because the farmee (usually a major) can move according to its own agenda which could be decades. I hope I haven't been too confusing. regards, teevee

To: Tomato who wrote (1829)	1/3/1999 1:29:00 AM
From: teevee	Read Replies (3) \| Respond to of 2251

Hi Tomato, Post Script- Given my knowledge and experience, I am very confident that grades will stand up to prior results. IMO, the risk of poor results is extremely low. The big suprise for me would be if the grades of the 5000 tonne bulk were significantly lower/diferent. The exception is if the bulk is split and a portion of it is taken from the south shore-the indicated grades here suggest that the results from a bulk from the south shore should be even higher than the north west peninsula. I would think that no one will mind a suprise on the upside. There is no doubt that as the price of Winspear climbs, more and more people will worry more and more and ask more questions. I have spent much time trying to poke a hole in this story, and I haven't been able to do it. regards, teevee