ready, get set ......., page-31

re: eddie-cfr Hi Eddie,

I would have to get all my files out and recalculate potential profits -but I think that would be academic because we don't know really how saleable much of the lower grade stones are on world markets. I got quite excited a year ago when results of Trench11 were announced -as you correctly note the raised gravels are older terraces - they host higher quantities of rubies and there are some high quality red/pink stones. If there is the quantity of rubies per tonne variously reported then production costs are miniscule in the total scheme of things - a simple low capital cost alluvial operation-except it does get wet and cold up there in winter !!The real test will be the percentage of good quality stones and/or the ability to sell the output of lower grade. I have not studied their latest reports -I have seen few on the ASX daily reading -but I will do that over the coming weeks as time permits -the truth is I lost interest because it always seemed the promise but never the reality !! In places like Sri Lanka a Swiss gentleman recently invested USD$10 million in a dedicated sapphire jewellery plant -so if the huge ruby output planned by CFR could be harnessed into a large scale jewellery operation -like they do with the small low grade diamonds -then it could take the world market for low cost ruby jewellery by storm. Like the way garnets have in some respects. I have not read recent reports - I don't know their plans -but that may be behind the Packer negotiations. Not just a simple cutting and marketing operation like they presently have but a big jewellery manufacturing operation -from mine to market direct. Many have tried and failed !! That would not be dependent on high grade stones -simply volume which they proved.

As for management -well in Gloucester there are the knockers -and I spoke to quite a few -but they are farmers and local businessmen who have no idea -I don't share their views - regardless of perceptions these guys have stuck to the knitting !! And with some real funds and maybe a big jewellery manufacturing plant the right people will be available no doubt. The delineation and mining of the rubies is the easy part -it is the grades/ colours and scale of their manufacturing/marketing that will determine their future.