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

To: m.philli who wrote (1218)	4/27/1999 10:36:00 AM
From: Claude Cormier	Respond to of 2402

Hello Mike. As of March 1st 1999, SWG had bought back 200,000 shares or so at an average price of $5.89. I guess they probably have completed their program by now are about to do so at the current low prices. As for the 3M shares swap. Well look at it this way. SWG never goes 100% into one single project. They split the risks with other partners and are perfectly happy with an interest of 30-60%. They have done so on all their 20+ JV's including Accha, Haoya, Poracota and the numerous others. They are doing same with CNB, maintaining their equity interest near 60%. That is their policy. As you said, SWG is cash rich. More than $30 millions. But they want to keep it that way. Interest revenues are almost paying for their annual G&A. That is an interesting position to be in. They have one other big project Haoya (56%) that could need a lot of cash in the next few years as they are funding it. Understand that SWG's role at Haoya is the same as Kennecot's role in Ontario and SUF's role in Brazil. Since it will take 3-4 years before they get cash flows from Accha, I think their strategy make sense. That is why there are still only 15 millions shares out on SWG. What can I say, they are conservative. And even if Canabrava has great potential, SWG is pleased with their current exposure.