To: Tomato who wrote (10 ) 2/17/1999 5:01:00 AM From: Chas. Read Replies (1) | Respond to
author: peter bullock
peter bullockNow in the Drivers Seat2/16/99 / 10:34:42 PM197997æ<<
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We are at the starting line and the gun is raised. The most interesting
4 months in WSP's history is about to begin and the speculative bubble
has begun its inflation.
The Deutsche Bank Securities Report authored by the well respected
geologist George Albino, has suggested that there is few pitfalls to be
expected. He, and rightly so, has correctly compared the Snap lake dike
system to Type II Kimberlite (Orangeite) deposits in South Africa.
Fissure mining is common place in South Africa and these types of
deposits are well understood. We can draw the following comfort from the
report:
The deposit is confirmed as Orangite. This has been rumoured but this is
the first time that I seen it confirmed in a report such as this.
Therefore the deposit is not comparible with anything else in the NWT
reported on todate. Orangite has a preponderance to have larger stones.
This deposit now has all the makings to be a world leader.
The suggested rate of mining of 3000 tonnes per day answers a question
that I had concerning the likely production rates. I like this rate. It
is less than what Diamet and Diavik propose but the richness will make
up the difference. If the capital costs are in the order of magnitude of
$250 - 300,000,000. this is less than half the $ that others are
spending for their mines. Underground operating costs are a bit more
expensive but not appreciably so.
I think the assumtions made to produce $17 per share are conservative.
If you take the most conservative estimates of Pit 2 - I get 1.47 carats
per tonne rated at $289/carat (based on the Deutsche report stating that
the 10.8 carat was found in pit 1) we get $425/tonne which, and based on
ratios to the $/share quoted in the report, this would put us over
$20.00/share.
The report overall is fair, comprehensive and sound. Do I think that the
stock will reach the levels proposed this year. No.
There is never a time line put on the share price estimate and I think
in the short term there will be enough doom sayers and arm chair
bandits, probably working for majors interested in this play, to keep
the share price down as much as
possible. (We could see double digits for a short period around June
15th). I think this share price is possible in perhaps 2 years and will
be much higher in 4 to 5.
Nice piece of information to have in your back pocket.
On your marks, get set............
Peter
