Agoracom

WE have talked about "blue sky" here while looking forward to new discoveries and new data from assays. The longer we wait the more dejected we become and the discussion abates. We also are basing our valuations of orebodies on 10% of insitu values. Now what that means is the cost of infrastructure, labor and materials to extract the ore and process it for delivery to a smelter/customer is 90%. What are the factors which would make this 10/90 ratio greater or less? They are the cost of POWER, Transportation, Onsite infrastructure and method of mining, and grade.

Establishment of power and transportation infrastructure for E1 alone would be formidable. However when the cost is shared among several McFaulds operations, they downscale proportionately and dramatically. The problem as I see it is another orebody to split these costs has only been hinted at to this point in time but we all believe that this is only a matter of time.The drills will have to confirm our belief and that takes time.

This brings us to method of mining and onsite infrastructure. I think E1 is an underground play and its not that deep. Open pit is cheaper only when the ratio of "waste moved" to "ore moved" is in your favor. However, the ore appears to be well defined in the host rock and underground mining can extract the majority of it at a profit. The grades are out of this world. When you think about this, 10% of insitu value is a joke. It should be much higher but the power and transportation costs are negatives. Once these costs are detirmined to be "shareable" The 10% will double or triple and have a similar affect on the stock price.

With all the JV's and other companies drilling in this unique geological phenominum, it may happen sooner than you think.