Michael:
Buyers of Yamana around here(that I know of) include the president's wife, my wife and our VP, Finance. At the same time, I am not aware of any insiders who have sold shares in recent months. Whether you see these as positive indications or not, you should recognize that insiders here have already put substantial amounts into the Company and most of us don't have more to invest, at any level. This is certainly the case for me. Having sold my home near Toronto and moved my family to Spokane -- including my wife, with her business and two teenagers -- and having bought a house here, I've already put everything I have into this Company.
As to what the market thinks of Yamana right now, I agree: we're getting almost no value from, or faith in, our prospects. There's nothing that I am aware of that I can do about it; no more than I can do anything about what the market thinks about Indonesia (which has proven gold and silver) or PNG (which has proven gold and other metals) or, for that matter, about exporation in general. Will we fall further? That depends on what the market feels like tomorrow and next week and next month etc., regardless of what we have or what we are doing. As for tax loss selling, who knows? Looking at recent volume, it feels like a lot of it has already happened but I could be wrong there too. I also recall what happened last year when tax selling was supposed to hit us but it was only temporary.
I would not have forecast this slump nor, I suggest, would most analysts or investors. In fact (forgive me as you've likely heard this before), a year ago, one of the most common calls was for us to divest of everything EXCEPT INDONESIA and GOLD. But markets change. If you are a serious investor who has been involved in the market for more than 10 years, you'll know that this is all part of a cycle.
Why should you stay in the stock or buy more? As you know, that depends, first, on your acceptable level of risk.
Second, what about the Company and its upside potential? Yamana Resources Inc. has one of the most prospective property portfolios amongst the juniors in the world. This includes at least five with evidence of distinct world class potential --ie. at least 1 million ounce gold or equivalent: Santa Cruz, Vanguardia; Northern Porphyry Belt, Chile; Indonesia; PNG; and Paraguay. Several others may develop significant potential: Washington state (especially Palmer Mountain); El Indio, Chile; Tierra del Fuego, Chile; and Fin del Mundo, Argentina.
The Company has enough money in the bank for more than another year's operation even if nothing else changes. We've cut our budgeted spending by about 25%. With a joint venture partner, that financial picture is even stronger. With two new partners... What's not so clear is the impact of good results and when they will be reflected in the share price.
Beyond that, the exploration market WILL turn around. The world still needs metals and the majors need more resources. Meanwhile, the multiple questions are tough but obvious: When? What's going to be the trigger? (gold prices? other commodity prices? a substantial find by a major? by a junior? What kind of find?) A find and a major acquisition such as Barrick's buying of Arequipa? What will be the effects of interest rate changes and unemployment? Will there be any more scandals? How rapid will the turnaround come? There are lots of (self-proclaimed) experts with lots of opinions. We're no better than anyone else -- but we're also no worse.
Disgusted with the performance of our share price of late? Aren't we all? But what we have going for us is what makes it disgusting for me. I'd be lying if I said the market hasn't made me nervous. But the Company hasn't. Its results haven't. Its board hasn't. Its technical teams haven't.
The only other point I wanted to make was this: Yamana Resources Inc. is a diversified exploration company focused on identifying prospective targets, adding some level of value and then developing them as efficiently as possible, preferably with someone else's money. That hasn't changed. That's our business and our strategy. I'm not aware of anyone out there WHO HAS THE FACTS who says we don't know what we are doing or who says we don't have good ground (including Westmin and Rio Algom) or who says we aren't credible or who says we aren't doing our best to produce results or who says we don't have a good exploration plan or who says we aren't sticking to it.
I hope this helps, at least a little.
Greg.
PS: I'm going to the gold show in Calgary on Sunday and Monday if anyone is in the area and wants to talk.
G. |
