Replies to post #314 on Advantego Corporation (ADGO)

[twilko]

Because this is the digr thread, and he will tell you that it is POS! I guess that means positive, but I think he assigns another meaning. I was being TIC (Tongue In Cheek). I have been a buyer only at this point, and have fought off some shorts on another thread.

The conveyer belts were in reference to something else. Ask yourself why we have not seen pictures of them on the Myng thread if they are so good? Once you have an answer to that, you too can take on all comers.

Terry

PS: I am on your side!

[Cytotekk]

Hi, is Twilko quoting you or our moderator? He must have had a reason for that post.

Yes, GE is making significant progress of late. I am pleased.

Good support at .25 and higher...can't get past that .30 ceiling but, with time, we will if GE continues on their current positive path. Sure wish I had loaded up at .03!

Paystreaks?...we shall see. It would be lovely if the paystreak deposits made the whole deposit resemble a zebra. I like the current methodology GE is using, makes sense. Atwood is no piker. Good folks on board, much better credentials than years ago. Conveyors? If they work that is all that matters.

I am still hanging in there with GE, it has become a hobby for me, four years of watching on and off. I have been accused of being a fence rider, suppose that is true. Reality is what I am looking for, not dreams.

Made good net friends back in the old days, have you checked out the TGL thread? I am sure you have. I like Digr, like to spar with him ;-) We all have our personal opinions.

Anyway, I still root for GE like I root for U of M. Not without criticism, of course. FSU vs UF tonight, BIG GAME especially with McPherson gone.

Colleen in Orlando.

Colleen in Orlando

[Cytotekk]

IFR-in case you don't check out SI:
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To:Douglas Lapp who started this subject
From: Fred C. Dobbs Saturday, Nov 30, 2002 2:15 PM
Respond to of 29952

Just wondering why this person feels that for an underground operation you need 4 times the gold production. Other than that, not a bad article.
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A Primer on Evaluating Gold Stocks

By Ellsworth Dickson
Nov 27 2002

www.resourceworldmag.com

The following was published in the Dec. 2002 issue.

For the inexperienced gold stock investor, there can be something of a mystery surrounding the evaluation of gold stocks - strange geological terminology, vague descriptions of "encouraging values" and how to interpret the importance of drill results. Basically, gold (and other mineral companies) can be divided into four categories:

Grassroots explorers seeking an ore deposit

Companies that have found an ore deposit and are defining its size and grade

Companies that have defined an ore deposit and are preparing a feasibility study to determine the economic viability of the project

Companies that are actually producing gold.

The only category of companies that can be evaluated like other industrial projects are those producing metal - the earlier stage projects have a different set of rules. Gold producers must be assessed according to how much gold they produce, cash flow, net present value of estimated future cash flow, the payback of capital invested, remaining gold reserves and exploration potential and the price-to-earnings ratio.

Finally, what is known as the book value must also be considered. The Canadian Securities Course textbook describes book value as "the amount of net assets belonging to the owners of a business (or shareholders of a company) based on balance sheet values." So, dividing the total assets by the shareholders' equity gives a ratio that indicates the remaining growth potential of the company. As an example, use the IAMGold Corp. shareholders' equity (or book value) ° gure ($127,475,000) in their 2001 annual report and divide it into the shares outstanding (77,982,690) times the current share price ($5.85) - the market capitalization. This computes to 3.6, a favourable number. If, on the other hand, the ratio were 1.0 or less, the company would be already fully valued with little remaining potential.

Investing in grassroots exploration companies offers the highest risk and the highest reward. An important aspect is what is nicknamed "closeology" - the proximity of a company's claims to a major discovery. During the Voisey's Bay staking rush some juniors soared from 7¢ to $7 on nothing but a close proximity to the discovery. When exploration results were negative, those stocks collapsed. This was a "get in and get out fast" situation.

It is easier to have faith in a grassroots exploration company when management has a successful track record of mineral discoveries. This indicates they have sound geological theories and know how to evaluate early-stage mineral prospects.

When looking at companies that have found a mineral deposit, it is necessary to know if the deposit remains "open along strike and to depth." A few high grade "grab" samples don't make a mine - they are encouraging as they prove there is mineralization on the property - but they are usually the most attractive specimens knocked off an outcrop in the field. As well, one or two good drill holes don't make a mine. It takes dozens, sometimes hundreds of drill holes "stepping out" to define the outer limits of an ore body as well as "infill" drilling to prove the continuity and grade of the deposit between the wide-spaced holes.

When considering a company that has more or less defined a mineral deposit and is proceeding with a pre-feasibility or feasibility study to determine the cost of operating expenses per tonne of ore, many facts must be considered. There are strict rules in place governing how a company reports mineral reserves. The lowest category is called a resource, then can be upgraded by drilling, sampling and tunneling to inferred reserves, probable and proven reserves.

It is at this point other things must be considered such as favourable metallurgy - if the gold cannot be extracted economically, there won't be a mine. Other things to consider include location. A mine at the Arctic Circle needs a higher grade than one on the Highland Valley of British Columbia. What about access to power, water, labour costs, civil strife, environmental sensitivities, mining dilution and current metal prices? In this case, consider the net present value of estimated cash flows. These figures are usually evaluated in research reports written by mining analysts.

As a rough rule of thumb, an open pit mine needs at least 0.8 grams gold/tonne (0.023 oz/ton) over several hundred feet to be economic; e.g. Glamis Gold's Picacho Mine, California. An underground mine needs considerably higher grades, perhaps 3.5 grams gold/tonne (0.102 oz/ton); however, much depends on location, depth of overburden, labour costs and so on.

Then there is the technical analysis of the stock's market performance. Resource stocks usually follow a definite cycle - accumulation, run up, top and the fall. Space limitations prohibit us from going into the intricacies of technical analysis - we will save that for a later issue. James Sinclair, Chairman/CEO of Tan Range Exploration Corp., has written a good article entitled "How to Identify a Good Buy - Top 10 Criteria on Selecting Juniors" that can be viewed at

http://www.financialsense.com/editorials/sinclair/082102.htm
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Regards, and good luck to all here, Colleen in Orlando




Colleen in Orlando