rising sun, page-11

Hey tektron,

Thanks for your input and glad to see you are bullish on EXM. I think it is the general lack of activity on the sp of EXM that has slowed down threads, not your posts, lol.

Actually I was reading the Gerbino post you referred to, as I wanted to see what you based your figures on. Being a October 2006 article, I was interested to see how much things might have changed in costs versus the price of gold.

He was using costs of around USD325-350 as a guide, with the POG at USD425-450 to make a mine profitable. It would appear that everything has about doubled since then, as I would say an average cost of $600-$750 would be in order for a lot of mines with reasonable grades. That actually gives a larger absolute profit (lessened of course in relative values due to inflation) with gold at about USD950.

I would hope that the POG you are working on, $650, would never be seen again, as with todays costs that would see very litte profit, or probably a loss for most mines.

Now, if a mine was to have shallow deposits, with very high grades, that would make the costs of mining decrease substantially. This is what I am hoping to see proved up at Rising Sun, and why I think, in todays prices that fatguts is probably reasonably conservative, but close to the mark, in working on a profit margin of about $400 per oz.

How that translates to a share price, well that is up to the sentiment of the market. Just about every junior gold company is undervalued right now. However, once we get the final results for the Rising Sun to Nobles Nob West line of lode and a JORC figure, then we should be rerated for those extra ounces.

If market sentiment swings back to the gold sector in a big way, then watch out, we may be in for a great ride. Remember, markets always overshoot.