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Gold/Mining/Energy : Solv Ex (SOLVD)

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To: tonto who wrote (3089)	5/27/1997 11:19:00 AM
From: David Coakley	of 6735

I've grown accustomed to bland conference calls. I think it is reassuring that management is willing to address questions and update shareholders as progress is made, however. The standouts of the call, in my opinion, are as follows: 1- Comment about partnership with major company. I suspect Mobil or Shell is in negotiations with SOLV. 2- Comment about financing. I believe a deal is imminent and that final stage negotiating is taking place. 3- Comment re: valuation of shares. It appears to me we're holding a stock that is easily worth over $100 per share simply based on the assets in their leases and their "proven in principle" method of recovering the oil. 4- Most interesting develoment is Asensio not having anything to grasp onto except to question the amount of recoverable oil in SOLV's lease. Is he aware of SUNCOR, Syncrude, Mobil, or Shell's leases and the verifiable amount of recoverable oil in those? Is he implying that there is no oil in SOLV's lease? What was his point anyways? Pace has asked SOLV to use their research internally due the large number of calls they received after SOLV went public with it last time. The info is in the 10q's. 5- I'm glad Asensio was on the call and firing away. It's helpful to know that he has nothing to hang his hat on except the hope that SOLV can't produce oil for $6 per barrel or that there is far less than 4 billion barrels of recoverable oil. I believe Asensio is hoping to keep as many independent shorts in short SOLV while he covers his own hide before SOLV announces financing and a strategic alliance with Raisio and Shell or Mobil. When DEBT financing of the $600,000,000 plant is announced, alliance with Raisio is announced, deal with Mobil and/or Shell (I believe both will be) what do you suppose the shorts will cling to? What will the market value the shares at then? What exactly are the short sellers counting on to justify the enormous risk they are taking in their position at $8 per share? Are they aware the plant was run last Thursday and Friday and that it "went exceedingly well"? The VIP's at the site were very impressed according to people in attendance. The clock keeps ticking and the short sellers escape hatch gets smaller each day. Good luck! Dave

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