Gabriel Resources Ltd V.GBU

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September 13, 2004 Tracker 2004-05: Nevsun's Bisha project in Eritrea temporary roadkill Publisher: Kaiser Bottom-Fishing Report Author: Copyright 2004 John A Kaiser ======================================================================= Tracker 2004-05 September 13, 2004 Nevsun Resources Ltd (NSU-T: $2.19) Nevsun's Bisha project in Eritrea temporary roadkill Over $100 million in market capitalization was wiped out last week when Nevsun Resources Ltd (NSU-T: $2.19) resumed trading on September 7 after announcing on September 3 that the Minister of Mines and Energy of Eritrea had instructed Nevsun and other companies to halt all exploration activity until further notice. No explanation was provided in the letter, nor was anything provided other than apologies when Nevsun executives met with government officials. Nevsun, which was trading at the $4 level, a level at which on September 1 RBC Dominion was comfortable crossing 1,150,000 shares at $4.18, traded as low as $1.95 before completing the week at $2.37 on 10,572,000 share volume. The stock did have what is called a "dead cat bounce" as the market grasped for benign explanations, but by Monday September 13 the stock price had subsided. Nevsun is a former $0.30-$0.49 bottom-fish buy recommendation that I upgraded to a Spec Cycle 100% Hold on September 9, 2002 on the premise that the company's Mali gold projects would benefit from a rising gold price. Since then, however, Nevsun's spotlight has switched from gold to the polymetallic Bisha copper-gold volcanogenic massive sulphide discovery in Eritrea. The company has about Cdn $60 million working capital and 76.4 million issued for about $0.78 cask breakup value. Based on a net interest of 90% for Bisha and 87.8 million shares fully diluted, and assuming the cash will get used up and the Mali gold projects turn out worthless, both of which are harshly conservative assumptions, the Bisha project is presently carrying an implied project value of $214 million. My interpretation of the Eritrean government's directive is that it is not related to an agenda of acquiring a bigger stake in the project. Instead, it is a byproduct of a broader agenda involving the Sudanese situation and possible plans by the United States and its European allies to use Eritrea as a staging area for a "humanitarian" invasion designed to put a stop to the genocidal atrocities being inflicted by Arabic Muslims with the support of the Khartoum government on black Muslims in western Sudan. This "stop the genocide" mission is in turn part of the propaganda battle between Al Qaeda and the United States for the soul of Islam. If I am correct, within a couple months we will see an apologetic explanation from Eritrea that the "regrettable" exploration halt was due to security matters, and not to a ham-handed effort by the government to redefine the ownership terms for mining projects. It would not surprise me at all if the current "political" crisis attracts predatory bids from major mining companies who have done their homework. I thus confirm the Spec Cycle 100% Hold recommendation in anticipation of a rebound in prices as the market discovers that the Bisha deposit has not been "nationalized" by Eritrea. To view the entire Tracker click the link below (login required): https://www.kaiserbottomfish.com/s/Trackers.asp?ReportID=88334 *JK does not own shares in the securities mentioned herein ======================================================================= Copyright (c) 2004 KAISER BOTTOM FISH (KBFR) All rights reserved. For more information visit our website at https://www.kaiserbottomfish.com/ or send mailto:[e-mail] Message sent on Tue Sep 14, 2004 at 5:09:52 AM Pacific Time =======================================================================