Several members have, in the past, looked at %'s of in situ metal values/tonne as possible indications of what to expect a takeover offer to look like. This morning I did some "back of the envelope" calculations surrrounding the Inco takeover of the Voisey's Bay deposit from Diamond Fields in early 1996. You may find the results interesting, to say the least.

In April 1996, Diamond Fields accepted Inco's takeover offer, reputedly valued at approx $4.3B. This gave Inco 100% interest in the property, subject to a 3% NSR payable to Archean Resources Ltd. At that point in time, at least as far as the general public knew, four separate deposits had been identified, namely the Ovoid, Reid Brook, Discovery Hill and Eastern Deeps. Within the Ovoid, Diamond Fields had outlined an open pitable proven reserve of 31.7Mt @ 2.83% Ni, 1.68% Cu and 0.12% Co. The remaining three deposits were estimated, geologically, to contain approx 100Mt of ore at a lesser grade. Since then, the overall tonnage and grade of all deposits has been estimated at approx 141Mt @ 1.63% Ni, 0.85% Cu and 0.09% Co. PGMs present are reported to be in insignificant amounts.

I have used early '96 and current metal prices for the following estimates of in situ metal values.

1996 Current

Ovoid $10.9B ($343/t) $37.8B ($1193/t)

All $29.0B ($206/t) $98.9B ($702/t)

At current metal prices, Voisey's Bay in situ metal value is approx 3.4X what it was back in early 1996. Therefore, one might speculate that Inco would be prepared to pay approx $14.6B today. How Inco came up with the $4.3B offer we still don't know. Falconbridge's last offer was I believe $2.9B. Was it a % of the proven, Ovoid in situ metal value or the Ovoid plus an estimate for the other three or using more sophisticated, DCF modelling?

Now, what can we confidently say about the valuation of the Double Eagle property. Probably not much right now until we see at least the 43-101 for DE1.

The main point to remember is that, before the majors became serious, Diamond Fields had already proven up 31.7Mt of open pitable reserves. Our DE1 is also an open pitable candidate.

Please note, the tonnages and grades were taken from different sources. If someone has other values, I would be more than pleased to recalculate using them.

Cheers

Keep the faith.

Geoprof