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Gold/Mining/Energy : ECHARTERS -- Ignore unavailable to you. Want to Upgrade?

To: John BOYCE who wrote (3086)	3/29/1999 2:23:00 PM
From: E. Charters	Respond to of 3744

That isn't a universal rule. Companies with certain kinds of exposure in terms of shares out and cost of projects and grade have to wait for an exploration climate to return or accept the low ball offers that cash rich majors are making. It is not a great choice. I have tried to persuade some companies to change their exploration outlook and consider richer short term projects but most do not want to change their ways. That makes no sense to me. Some projects make more sense at high interest rates, others with larger down the line returns make sense at low interest rates as the money can be raised for them. But you have to do what you can do to survive. We see Greenstone developing comptemporarily and Kinross mining ounces profitably. Barrick had its best year ever in 1998. I still think some project that make obvious sense can go ahead. Even some miners like Roxmark who have had nothing but farm ins for the longest time and would at first glance appear like a cash strapped nowhere to go junior, can launch attractive programs in with a high grade concept and make good returns. But you have to have your ducks lined up and that is where Wildcat is looking. The projects must fit the times and then you can weather the worst prices. I am a mining fan. Call me crazy but there are more and better projects to actually mine to add value to your company, off the beaten path than there are to attract the same old exploration dollars in the flavour of the month areas. I think the mistake mines have made in the past with all their geostatistics is that numbers cannot tell you when nature stopped depositing gold. Geology can guess at it though. And it would behoove the miner to pay down his Capex with high grade as quickly as possible. You can mine all kinds of low grade at low prices if the mine and mill are paid for. That is, of course, a tough option if your high grade mining precludes taking the low grade later. EC<:-}