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Gold/Mining/Energy : SOUTHERNERA (t.SUF) -- Ignore unavailable to you. Want to Upgrade?

To: Rocky510 who wrote (2824)	4/10/1999 11:17:00 PM
From: VAUGHN	Read Replies (2) \| Respond to of 7235

Hello Jimmy No, not beyond what I have previously posted here and on other related threads. My nose just suggests that remaining very cautious on Back Lake enthusiasm would be a prudent course of action at least until the word +3 hectare pipe is used by SUF. The signals I read in that last NR left me less than euphoric at least so far as Back Lake is concerned. I remain very upbeat with regard to Yamba potential and anticipate positive developments and exciting news to be announced shortly and routinely throughout this spring, summer and fall. That is not a story that will fade with the melting of this winter's ice pack. Most Yamba play drill targets are either close to shore or under small discrete lakes, therefore drilling can occur from shore and throughout the year and again in 2000. To offset any market jitters or games with SUF the day of the NR, I hope management will include Yamba progress news in their text especially if it deals with the revelation that the Munn kimberlite is not a pipe. In my non-professional opinion but knowing the cost of development and operation here which certainly exceeds the RSA, a lake hosted richly diamondiferous dike, even an extraordinarily wide one, would have to be at least 1km and probably 2km or more in length to be economic to develop and mine. That assumes adits can be driven from shore to access the ore and a minimum of 300m of ore is left as a cork or cap between the remaining ore and the lake. In such a scenario, a rich dike might contain diamonds worth between $315,000,000 and $630,000,000US to 1,300m. Development of a smaller mine say 5,000tpd might run $100,000,000 so the net would be between $2.15 and $6.30 for every dollar spent. That is not a return on investment that is likely to excite the market (7-15 years to repay the initial cost + interest). Kimberlite especially pyroclastic reconsolidated kimberlite is notoriously porous and prone to water infiltration. When Aber ramped down to test 418 and 21 the water infiltration they were dealing with was alarming. Hence, for that and a few other reasons, they rejected the option of mining under Lac de Gras. A kimberlite dike is less likely to be pyroclastic than a pipe, but even hypabyssal ore is quite pervious to water especially under pressure. Additionally, it is likely not homogeneous rock and faulted hence structurally unreliable. SUF could shot-crete the plug after driving the initial horizontal adit the length of the dike, then back fill with concrete to form a more water tight plug, but the cost would be significant. On the other hand, a dike could reasonably be mined down 4km which might quadruple the above referenced reserves, but the production rate probably still could never exceed 10,000tpd and more likely 5,000. A long-term asset yes, but likely to excite the market, I doubt it. Sorry, maybe I am suffering from cabin fever and just down in the dumps, but that is just the way I see it. Regards