RADAR SCREEN

Market Commentary

GLENN R. BROWN, Ph.D.

416.507.2336

gbrown@haywood.com

DECEMBER 14, 1999

2000

San Joaquin Basin Update, Inca Pacific Resources

RADAR SCREEN WILL SUSPEND OPERATIONS FOR THE HOLIDAYS ON THURSDAY
DECEMBER 16, 1999. RADAR SCREEN RESUMES ON JANUARY 5, 2000.

World Markets
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438.23
16282.7
769.94
1002.64
36.37
2369.25
3108.1
18165.55
6694.1
1078.7
553.42
7768.17
2163.3
11192.59
3658.17

2.83
-159.41
1.20
-11.01
-0.06
-17.07
-1.80
-39.53
-16.60
-7.70
0.00
-3.91
62.30
-32.11
37.93

0.7%
-1.0%
0.2%
-1.1%
-0.2%
-0.7%
-0.1%
-0.2%
-0.3%
-0.7%
0.0%
-0.1%
3.0%
-0.3%
1.1%

Gold
Silver
Platinum
Palladium

$279.70
$5.09
$447.00
$418.00

Zinc
Copper
Nickel
Alum.

$0.537
$0.795
$3.601
$0.710

Crude Oil
H.H. Gas
C$ 67.62

$25.38
$2.505
-0.02

Base metals are current LME prices. Precious metals are current
prices US$. Crude and natural gas price for front month delivery
(NYMEX). All other prices as of 0830 h EDT.

Business Indicators
Dec. 14 Consumer price index for November: 0.1%. Consensus estimate: 0.2%. Prior report: 0.2%.
Dec. 15 Industrial production and Capacity Utilisation for
November. Consensus estimate: 0.3% & 80.7%. Prior report:
0.7% & 80.7%.
Dec. 16 Initial jobless claims for the week of Dec 11. Consensus estimate: 290,000. Prior report: 293,000.(Bloomberg)

1. San Joaquin Basin Update

RICHARD ODDY, M.SC. (604-643-1189)
Bellevue 1-17R - A 24-hour clean-up flow was completed on Friday and Saturday, and the
operator now believes that the well is sufficiently cleansed to start the production-flow-test
program. As of Monday morning, the testing instruments were being put in place, and the
program about to begin. It is expected that the well will be allowed to flow for several days at
various rates, then shut in to record pressure information. The total program should take
about one week. Results could be announced in late December.

Eel River
Basin
Sacramento
Basin
Sonoma
Basin
San Francisco

San Joaquin
Basin

re
nd
nA
Sa

Half Moon
Basin

Fa
as

Santa Maria
Basin

ult

Bakersfield

Ventura Basin
Los Angeles
Los Angeles Basin
San Diego

Berkley ELH #1 - The well is now drilling at 16,956 feet in cherty shales above
the uppermost Temblor sandstone. The drilling rate is slow throughout the
cherty-shale section, but the top of the Temblor is believed to be only
100 to 150 feet from current depth. The sandstone encountered just
above the casing point was probably the Devilwater Formation.
Imperial
Valley
Basin

Berkley Cal Canal #1 - The production casing is being cemented.

The test program at Cal Canal may not begin until mid-January.

Haywood Securities Inc. 11th Floor, Commerce Place, 400 Burrard Street, Vancouver, BC, Canada V6C 3A6
604.643.1100 Toll Free (CDA) 1.800.663.9499 Haywood Capital Markets Institutional Desk 1.800.944.4303

RADAR SCREEN
Market Commentary

GLENN R. BROWN, Ph.D.

416.507.2336

gbrown@haywood.com

DECEMBER 14, 1999

2. Inca Pacific Resources Inc.

JIM MUSTARD, P. Eng. (604-643-1124)

FAVOURABLE COPPER RESULTS FROM

MAGISTRAL SKARN PROJECT IN PERU

On Monday, Inca Pacific released results of the first three holes of an

eight-hole program at Magistral being conducted by Anaconda Chile
Market capitalization:
C$ M
8.8
S.A. Hole 1, drilled on the south side of a prominent northeast-trending
52 Week High:
C$
0.53
valley (coloured yellow in the accompanying map) encountered 0.86%
52 Week Low:
C$
0.10
Weekly trading volume:
135,612 copper over a 72-metre length. Holes 2 and 3, drilled 200 metres apart
Haywood Liquidity Measure:
years
2.8 on the north side of the valley, are very significant, since they are the
Current Assets
C$M
1.19 first to be drilled in the area. Hole 2 had an average grade of 0.73%
Long-term debt:
C$M
nil
copper over an interval of 332 metres, and hole 3 had an average of
Adjusted enterprise value:
C$M
7.6
0.62% copper over an interval of 442 metres, both holes having stopped
in mineralization. Substantial amounts of molybdenum are also present. Recent detailed mapping
and interpretation of the skarn indicate a somewhat linear aspect with a westerly dip capped by a
thrust fault (see the accompanying map).
Recent Price:

C$

0.45

Shares O/S:

19.5

Magistral is a copper-skarn target located in the Department of Ancash, Peru, 140 kilometres
northwest of the Antamina
deposit,
currently
under
preproduction development with a
budget of US$2.2 billion.
Antamina is a copper-zinc skarn
deposit with an ore reserve of 500
million tonnes averaging 1.2%
copper, 1.0% zinc, 11 grams/tonne
silver, and 0.03% molybdenum. At
Magistral, as at Antamina, coppermolybdenum mineralization is
found disseminated in a quartzmonzonite intrusive as well as a
skarn aureole. Antamina will be the
third-largest concentrate producer
in the world, after Chuquicamata
and Escondida.
Inca Pacific owns 100% of 3,300
hectares of claims surrounding a
250-hectare property owned by the
Haywood Securities Inc. 11th Floor, Commerce Place, 400 Burrard Street, Vancouver, BC, Canada V6C 3A6
604.643.1100 Toll Free (CDA) 1.800.663.9499 Haywood Capital Markets Institutional Desk 1.800.944.4303

RADAR SCREEN
Market Commentary

GLENN R. BROWN, Ph.D.

416.507.2336

gbrown@haywood.com

DECEMBER 14, 1999

Haywood Securities Inc. 11th Floor, Commerce Place, 400 Burrard Street, Vancouver, BC, Canada V6C 3A6
604.643.1100 Toll Free (CDA) 1.800.663.9499 Haywood Capital Markets Institutional Desk 1.800.944.4303

RADAR SCREEN
Market Commentary

GLENN R. BROWN, Ph.D.

416.507.2336

gbrown@haywood.com

DECEMBER 14, 1999

Government of Peru. Inca Pacific has a three-year option to purchase 100% of the internal
property, with the government retaining a net-profit-royalty interest. Anaconda Chile S.A.
is earning a 51% joint-venture interest by completing a defined work program for a total
cost of US$5.75 million over a three-year period to December 21, 2001. A leading copper
producer in Chile, Anaconda Chile S.A. can increase its ownership to 65% by preparing a
bankable feasibility study within two years. Drilling by Anaconda began in late October
and was initially budgeted at 2,000 metres, but we have since learned that some 2,500
metres have been drilled.
Prior to 1974, Cerro de Pasco Corp. conducted limited underground workings and diamond
drilling. A 1997 study, commissioned by the Government of Peru, estimated the total
potential mineralization at Magistral to be 108 million tonnes grading 1.34% Cu, 0.03%
Mo, and 0.19 oz./tonne Ag. The porphyry potential was estimated to be 270 million tonnes
grading 0.51% Cu, 0.04% Mo, and 0.12 oz./tonne Ag.
Elsewhere in Peru, Inca Pacific is seeking joint-venture partners for its Cerro Oro goldtarget project. On the Cueva Blanca project, St. Elias Mines is earning a 49% interest
through a work program. At the Santo Domingo tin project, under option from Minsur,
where Inca Pacific is earning a 51% interest, a work program is being established, subject
to funding.
DISCUSSION
These first drill results, as significant as they are, indicate a widespread skarn system in
which copper and molybdenum grades are highly elevated, but it also contains zones of
lower grade. While there is much similarity between Antamina and Magistral, only additional
drilling can establish if the size and grade will be comparable. At this stage it is too early to
tell if a zinc zone is present and if the average grades are indicative of the entire deposit.
The remaining drill holes 4 to 8 will not be released until January 4, 2000. In the meantime,
based on the first three holes and the fact that the skarn body is open to the north, the
south, and at depth, we are recommending Inca Pacifc as a SPECULATIVE BUY below
$0.35. Because of the drilling program, the share price has doubled in the past few weeks.
We expect continued short-term selling pressure, as some investors take advantage of the
liquidity, especially those holding the stock for some time and those seeking tax-loss selling.

Haywood Securities Inc. 11th Floor, Commerce Place, 400 Burrard Street, Vancouver, BC, Canada V6C 3A6
604.643.1100 Toll Free (CDA) 1.800.663.9499 Haywood Capital Markets Institutional Desk 1.800.944.4303

RADAR SCREEN
Recommendations: Mining, Oil & Gas
GLENN R. BROWN, Ph.D.

416.507.2336

gbrown@haywood.com

DECEMBER 14, 1999

On this page we summarize our best-buy recommendations for resource stocks. Haywood Securities will provide regular future
updates and evaluations on this sheet as part of the daily Radar Screen commentary. We have selected companies with leverage to
underlying commodity prices, good management, and strong assets. We caution that grassroots projects are only for investors
with a high tolerance to risk. Investors are advised to take profits as drilling progresses. Note that any changes to our
recommendations will be summarized in the Revisions Box (bottom left). For more information on these stocks, please refer to
Radar Screen. Recommendations are listed by date.
EXPLORATION (RISK ACCOUNTS ONLY)
PLATINUM AND PALLADIUM
ALTORO GOLD
PACIFIC NORTH WEST
GOLD AND DIAMONDS
GREAT BASIN GOLD
DIAMOND FIELDS
PACIFIC RIM

OIL AND GAS

SAN JOAQUIN BASIN
Elk Point
Trimark
Westminster

ATG.V
PFN.A

GBG.V
DFI.T
PFG.T

ELK.T
TMK.V
WML.T

RECOMMENDED

Sep. 23, 1999

Oct. 18, 1999

Jul. 26, 1999

Sep. 7, 1999
Sep. 22, 1999

Spec.
Spec.
Spec.

ROYALTY COMPANIES
FRANCO-NEVADA
SOUTHWESTERN GOLD

REVISIONS BOX

FN.T
SWG.T

PRODUCERS (COMMODITY LEVERAGE)

RECOMMENDED

NICKEL
LIONORE MINING

LIM.T

COPPER
IVANHOE MINES
AUR RESOURCES

IVN.T
AUR.T

ZINC
EUROZINC
BREAKWATER

EZM.V
BWR.T

GOLD
MERIDIAN GOLD
GOLDCORP
ELDORADO GOLD
VICEROY RESOURCE

MNG.T
G.A.T
ELD.T
VOY.T

DIAMONDS
NAMCO
ABER RESOURCES

NMR.T
ABX.T

GAS
PURCELLPEL.T
BERKLEY PETROLEUM

BKP.T

OIL
MAGIN ENERGY
ATHABASCA OIL SANDS
CANADIAN OIL SANDS

MGY.T
AOS.UN.T
CO.UN.T

INTEGRATED MINING
TECK CORP.

TK.B.T

Spec.

Nov. 25, 1999

Nov. 25, 1999

Radar Screen is prepared by Haywood Securities Inc. for use by Haywood Securities Inc. and Haywood (USA) Securities Inc. Estimates and projections contained herein,
whether or not our own, are based on assumptions that we believe to be reasonable. The information presented, while obtained from sources we believe reliable, is checked but
not guaranteed against errors or omissions. Haywood Securities Inc., its subsidiaries and their respective officers, directors and employees may hold positions in the securities
mentioned and may purchase and/or sell them from time to time. Haywood Securities Inc. may have acted as agent for one or more of the companies mentioned with respect
to a distribution of securities. Radar Screen is neither a solicitation for the purchase of securities nor an offer of securities. Our recommendations are intended only for clients
of Haywood Securities Inc. or those of Haywood (USA) Securities Inc. and such clients are cautioned to consult the respective firm prior to purchasing or selling any security
recommended. Haywood Securities Inc. is a Canadian broker-dealer, a member of the Toronto Stock Exchange and the Canadian Venture Exchange. Haywood (USA)
Securities Inc. is a wholly owned subsidiary of Haywood Securities Inc., registered with the U.S. Securities and Exchange Commission and a member of the National Association
of Securities Dealers (NASD) and SIPC.

Haywood Securities Inc. 11th Floor, Commerce Place, 400 Burrard Street, Vancouver, BC, Canada V6C 3A6
604.643.1100 Toll Free (CDA) 1.800.663.9499 Haywood Capital Markets Institutional Desk 1.800.944.4303