Corner Bay Silver (BAY.T) Message Board

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Gold/Mining/Energy : Corner Bay Silver (BAY.T)

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To: ahhaha who wrote (1484)	10/17/2000 10:38:29 PM
From: s.jennings	Read Replies (1) of 4409

<<A drop from $3 to $2 isn't unusual for cats and dogs, but Hecla didn't do that.>> A drop from $3 to $2 is perfectly normal for an exploration company making the transition from the discovery phase of its life cycle to the analysis phase, due to the perception of dead money that you mentioned. If the analysis results in a positive development decision then the stock will begin to appreciate as the actual production date nears. HL and CDE didn't drop like BAY because they aren't in the same phase of their corporate lives. SIL didn't do it because SIL doesn't do anything. It wasn't public during the exploration phase and the market decided the name Soros was worth $10-$12/share at the onset of the analysis phase. I'm convinced that the same 20,000-30,000 shares gets flipped back and forth between the same 2 or 3 brokers every day just to create the illusion of a warm body. To me the only reason for an investment in BAY at this time and price would be based solely on the potential for a takeover or a significant rise in the POS. Not that the stock isn't undervalued relative to its intrinsic value, but, the market doesn't care what the value is today. They want to project what the value will be 3-6 months from now and a takeover or rising silver prices are the only impetus to produce a significant,short term increase. If the company proceeds to production themselves, there is no accurate way to determine a per share value until the final development costs and gearing ratio are known. This is another reason SIL does nothing. The projected development costs seem to be a bit light and the banks apparently are not interested in financing as large a portion of the costs as SIL would like. I'm not familiar with cats and dogs but to me, the price action in BAY is typical of probably 90% of the exploration companies that have travelled the same road BAY is currently on and is more the result of market expectations and impatience than fundamental value. Obviously, I am in agreement with a number of points you've made. I do however disagree with your inference that this situation is company specific to BAY and should be viewed as a negative. Seems to me that everything is progressing quite normally. I may even start nibbling in the near future.

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