To: Jason
Jason: Last time I got a rejected email. Wonder if it will work this time? I'll post on SI as before.
1. Yamana Resources Inc. has approx. US$19 million in cash right now, sufficient funds to carry us for the next 12 to 18 months. Exploration expenditures for the year are planned at about $17 million, with about one-third of that coming from our partners (eg. Rio Algom spending $20 million over 5 years on Santa Cruz, Vanguardia, Argentina to earn a 50 % interest in the properties). There are no financings under active discussion at this time. The tradition in the industry is to finance when you can, more than when you need to. We would still like to get a hold of 100 % of the PNG properties but, for the time being, we are maintaining our equity position on Union Mining NL (11.1% / 17.6% fully diluted) and are earning in on the properties themselves (Aust$10 million / 4 years for 51 % -- we'll likely have 30 % this year).
2. Re. Yamana's stock price: I beleive there are a number of factors, including Bre-X, which has taken the legs out from almost all of the juniors. From the $6.65 52-week high we we hit in March, we fell quickly to shorters (about 2.1 million as I recall) who jumped at that raise, to the high $5's. Then bad news started coming out of PNG, costing us another 50 to 75 cents. This was despite the fact that we are well separated from the troubled areas. Also, Union: has excellent relations with the land owners around the properties (they built the school there and are the main source of local income, employing dozens of people from the various tribes); was invited to co-represent the PNG government at the PDA conference in Toronto; has a full-time community relations person at Fergusson Island; and, has been asked on several occasions (and always complied) to assist islanders in solving the minor problems involving the people there such as thefts and vandalism.
Then came Bre-X. That cost us about $2 more. Then came the other couple of Canadian exploration company problems / scandals, destroying confidence almost completely.
I've put out a handful of press releases over the past several weeks, many of which would have boosted our share price six months ago. But this market has too many nervous shareholders. Too many institutional investors trying to make up for their Busang loses. Too many naysayers. Which is not to say they are "wrong." It's just that I believe that we are doing what we can to support the share price: a) we are drilling; b) we are spending money to develop our properties, several of which have multi-million ounce potential; c) we are maintaining our focus on being credible AND positive; and, d) we are communicating with our shareholders and The Street in general so that they know what we are doing. ...
Yet the price has fallen anyway. I beleive we are at or near our low... but who knows? What I DO KNOW is that this is a solid company, with solid management, a solid board, a solid technical team, with excellent properties in many of the most prospective regions of the world and an eye fixed on enhancing shareholder value by looking for "elephants." We also spread the risk and support our team by pairing with significant industry partners and we will not PROMOTE.
(As an aside, a couple of shareholders a day, lately, have been calling and asking/demanding/wondering/hoping that we get more aggressive in our communications. They also want what we want: an announcement that we have the proverbial one-million-plus-ounce mineable resource. The short answer is that we may or may not be close, but we don't have enough evidence to say we have it yet. I remind them that if we say we have it -- based on what we know and believe -- that would help the share price. However, once the (inevitible and quite proper) questions arise about exactly how that resource was calculated -- number of drill holes, depth, spacing, type etc. etc. -- without the complete answers, our credibility becomes shot and we are cooked for the indefinite future. As would be our shareholders. We haven't taken that approach in the past and we won't now.)
I expect that the market will turn-around once someone makes a major new discovery and / or once there is a major takeover of a junior by a senior (like Arequipa) and/or when the gold price strengthens and/or when the major producers show their hunger for a major new deposit or two and/or... People need / want gold and other metals. people want to see successful companies and they want to earn a profit. This has been a huge hit, but we've come back from worse times.... (speaking of which, the macroeconomic indicators are more positve than not, which also helps.)
At Yamana, we are in this for the long haul. I don't think it will take years for the market to come back. And when it does, we'll be here, doing what we were doing before and what we are doing now.
I hope this helps.
Cheers
Greg Taylor
Yamana Resources |
