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Gold/Mining/Energy : Bre-X, What happens after Strathcona results?

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To: Serge Collins who wrote (8)4/27/1997 4:22:00 AM
From: RonS   of 31
Dave S and all,

I don't agree the the junior golds will drop never to return
like the way you mentioned of biotech or the diamond plays.
The allure of gold as well as the potential of the junior golds
is strong. I think it is likely that investors will come back
and a significant rise in the price of gold could be the catalyst.
I would think that in general, the type of investors involved in this
area, are either trying to supplement the return of their portfolio
with a limited amount of higher-risk higher-return type stocks, or
investors who are comfortable with exposing all their money to higher
risks. In any case, they are accepting of the risks (to a degree) and
probably will eventually accept the outcome of the Bre-X fiasco. One
might say the investors who lost most of their money in Bre-X will never
come back, but I think they will. They will no doubt be a wiser and cautious
group, which helps to explain why, as mentioned earlier, the anticipated
move to quality stocks. Currently, the huge desire I see for learning
about investing, mutual funds, 401K's and the success of newsletter
writers is evidence that investors will likely stay in the game and
try to win the game. Memories will fade and probably alot of investors
will chalk this up to experience on their way up the learning curve.

Regarding whether the gold is there or not, here's my 2 cents:
The geology is highly prospective with intersecting faults, rock types
and mineralization commonly associated with gold deposits. The
operating MINES within a rather lightly explored area indicate that
the potential does in fact exist. However, a gold deposit of the
size of 70 million ounces or more blows away all the geologic models
and therefore a much smaller deposit of 5-15 Mill. oz. is more likely.
I think were a long ways from knowing the whole story, and the book
will be better than the movie.


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