To all: Have not ventured an analysis for a while. Like most, quite shocked by the turn of events. Still long on Bresea, reduced my BXM position and took out much reduced profits, but profits just the same. The heady super rich days are gone, have to settle for mere wealthy. Apologize to all the newcomers who have not seen my previous style of posting, I am not bragging, just stating my frame of mind. Quite philosophical about it now. Took some getting used to. Still feel quite badly for all who were forced out on margin. My mainstay was in RRSP so I emerged, relatively speaking, quite well off. Depressing nonetheless for long time BXMers when you compare where we were, to where we are now.
But here are my thoughts of the day. I begin with the following hypothesis. If one assumes that Indonesia is the most corrupt nation on earth, and there is much evidence to back up that assumption, AND, if one assumes that psychological projection works just as well in Indonesia as it does in North America, THEN, it is reasonable to assume that when our good friends the Indos and other friends like Monk, heard about the humongous deposit uncovered in Busang, they were at the very least suspicious about the claim, and probably thought salt before gold. Given that the Indo climate is one of suspicion, coercion, bribery and the like, due diligence probably comes in the form of a huge spy network of contacts. If there was any chicanery, or scamming going on, we North American small investor neophytes may be easy marks, but I'm willing to give the Indos more than their due, and expect that it would be a lot harder to fool them. Not with labwork and assaying techniques, but more in the human dimension of knowing who's who and what's what and most especially what's not what. In short, if something is coming down, the jungle wiseguys like Hasan would know if anybody does.
That is why I believe there is gold in them thar hills, but will Bre-x survive this debacle and get to keep any of their fair share. They already had 45% stolen from them. When it was Monk doing it to them, he got nothing but praise from our Canadian media. When it turned out to be Freeport and the Indos claiming a free 45% share of the pie, nary a peep from the media about the "scandal". Focus then was on Walsh's ineptitude at handling the greedy Indos. No hint of salting, overstating, etc. just everyone looking to cut themselves in on a bigger piece of the evergrowing pie, at the expense of a brash Canadian junior who had not done it's political "due diligence". Serves them right was the mainstay of opinion. When in Jakarta, do as the Jakartans do or pay the 45% price.
But to the matters at hand. Like many others before me, those seven no show holes by FCX are pretty damning at this point, and the "coincidence" (mystery/timing) of De Guzman's death was the final "nail in the coffin" so to speak. That is what justifiably shaved 80% of the stock's market cap.
But then, 300 plus holes, thirty months with everyone and his mother visiting the site (video tape didn't seem to bother Nesbitt people when he brought it home back then, didn't stop Northern Miner from declaring Walsh minining man of the year, where was NM dd then?), fights with the Indos over land claims and paperwork, delays in Cows, Merukh (remember him?) intrigue with Barrick, Suharto children, then Hasan and Freeport. Too many people with too much intelligence (as in CIA type) were too interested for too long to make this play go away as an elaborately, ingenious scam. Principles like Walsh, Felderhoff, and others including the likes of you and me sold some off to pay the bills, take vacations, buy a car, etc. But percentage wise, the money taken from the table was small scale. None of the Bre-x front people, including the geologist team led by De Guzman behaved right up to the Freeport leak, as if this was a scam. Too long, too public, and too much overkill in terms of money gained. Normal grand scams are relatively quick, with smaller money and far less need for the type of world wide publicity that Busang garnered.
I'm with Dustbin. There is more to this than meets the eye and we may never know the whole story (Hollywood notwithstanding) But the stock is trading at $25 and $10 levels (pre-split) because a lot of money still believes there is some gold. How much is the first half of the question. The second half is who will get to keep it. There is even an invisible third half if you will. The third half is when will the discovery of the gold be announced. I don't necessarily mean by Strathcona or Freeport. Maybe it will come several years after we all go away with a bad case of jungle fever, and then Hasan (quietly) announces in the year 2005: "Gee isn't that a coincidence. There was gold in Busang after all!" (Makes you wonder what de Guzman knew and when he knew it).
Sadly, I was the first one to mention the Treasure of the Sierra Madres many moons ago when many of us were much wealthier. For you younger folks who hate black and white films, in it Bogie and two pals discover the gold, are attacked by Mexican banditos, survive, fight amongst themselves, and in the end, the gold (no salt there) ends up in ripped bags, scattered to the wind. Not a pretty sight but a hell of a movie. Never did like the ending. Wish we had all learnt from it though. |
