Hugh,
Proxy:
All proposals were passed. Proposal #3 was required to provide management with a measure of control to facilitate the development of the company in an orderly fashion. Regulators must know of their plans and have accepted them.
Booklet:
The Investing Edge booklet, refer to message #67
One paragraph only, maybe author could elaborate further. Quote from page 53: "A final key point is that it is always important to watch what the principals are doing. Some indicators of positive action on part of the principals and associated parties would be share for debt financings... . It is important that they benefit significantly from the appreciation in share value."
The booklet is general reading, esp. pgs.46-55 on investors' emotions, staying objective, overconfidence and being cautious listening to IR.
I can provide a copy if one can't be found.
Chimborazo:
Until July 7, the project is legally under the terms of the current contract. The project has been in limbo since last year when Inmet left.
Kaiser said that the acquisition terms of the deal make even a scaled down version a non-starter. He wants Marr to find a replacement for Inmet and persuade Cyprus to rewrite a much softer deal.
Inmet may still be back in one capacity or other, despite rumours of it being for sale. It has left Antamina project, has cash, and is currently reviewing all of its projects.
Geodex still intends to pursue Chimborazo. Contacts with a potential JV partner and Cyprus have been maintained.
As for rewriting the deal, I have the impression from management that it is possible. Low copper prices from decreased demand plus future oversupply concerns will be some of the factors considered. Comparison with other similar projects will be taken into account.
Financing the project without excessive dilution is also a possibility with the new partner. Management's pursuit of this project suggests that some form of financing can be obtained.
Kaiser's concerns have been addressed. Whether they will be resolved, only time will tell.
The $10/share estimate is partly derived from information bulletin of Jan. 9/97. Kaiser made some assumptions to arrive at this value. NPV analysis and geological reserve models played a large role in this estimate. Both have their limitations, but all use these accepted means of measure. The price does imply a very good project.
New Projects:
Any new projects will probably be at the advanced stage, as this is the firm's stated corporate goal. Some idea of potential will be evident immediately if such is the case. The next news release on regarding such should provide more information.
A small initial financing is being considered, and later in the year a larger one. Prices must move up based on new property potential, and/or favorable circumstances at Chimborazo and an improved junior market. Today's dip of the VSE index below 600 indicates pessimism exists.
The investment decision:
I don't expect anyone to base their decisions on the above. The information is general and vague at times because the relevant details required to make the decision, is still insider information.
Ignoring both technical analysis and listening to management, I feel not enough information exists at this time to make an informed decision. My preference would be to wait for either a news release, and/or evidence of a price rise. Then I would phone the company to gain further insight or have them explain any large price increase.
Investors can always wait until independent analysts make their recommendations before investing.
Phone management for more details. It is your money and you have a right to know what this investment offers. For current shareholders who own part of the company, the same rights apply.
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