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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: Enigma who wrote (1124)	4/6/1999 10:29:00 PM
From: mineman	Respond to of 3558

I am going to find out more about the Bulyanhulu property tonight. I'll let you know...

To: Enigma who wrote (1124)	4/7/1999 9:42:00 AM
From: mineman	Read Replies (1) \| Respond to of 3558

My contact said Barrick were blind-sided by slick operators at Sutton who conned them into believing uneconomic numbers. He said the main vein, which contains 95% of the gold, has less than 1 million ounces of economically extractable gold. Kilborn said the main vein has 2.5 million ounces proven down to 2,000 feet depth, however my contact says Kilborn's numbers are not economically feasible as: - one end of the vein could not be economically mined as it is only 3 feet wide grading .45 ounce per ton and there would be over 100% dilution, - the other end of the vein is 12 to 20 feet wide but is uneconomic as it averages less than .2 ounce per ton, and - the middle part could be mined at .4 ounce per ton down to 2,000 feet deep but contains less than 1 million ounces gold. He said the middle part of the main vein continues below 2,000 feet with grades lower than .4 ounce per ton, but the costs of mining below 2,000 feet depth will be much higher demanding grades above .4 ounce per ton to support the high development and mining costs. The rock needs fine grinding to recover gold and 30% goes into a copper concentrate which will need to be shipped a long way to a smelter. The high cost of underground mining, milling, power-generation, and shipping will eat up most of the .4 ounce, or $110, per ton and so the mine will just break even. If my contact's numbers are correct, and they appear sensible, Barrick paid $520 per ounce for 1 million ounces gold. If Kilborn's numbers are correct Barrick paid $200 per ounce for 2.5 million ounces in the main vein. Either way it appears Barrick were blind-sided!!