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Strategies & Market Trends : Ride the Tiger with CD
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To: LoneClone who wrote (58426)8/1/2006 7:56:50 PM
From: zoo york  Read Replies (1) of 313017
 
Hi LC!

The latest batch of exploration results from EDR were very good. The problem holding EDR back is the same as FR, IMO. Both are juniors with bright futures, but the current results are just not that impressive to warrant higher market caps. In the latest quarter EDR reported production averaging only 279 tpd. That just isnt good enough for a small mining company to make any money. The culprit was downtime caused by the need to repair and refurbish equipment. That is exactly the kind of problems that I expect GPR will be facing sometime in the next couple of quarters as they attempt to increase production. In the case of FR, the company has been dealing with poor efficiency and recovery issues that have the effect of making their ongoing operations uneconomic. None of these problems are insurmountable, but for the time being, one can expect companies like EDR and FR will not make significant gains in share price until they resolve the operational demands that are holding them back.

I think some form of consolidation among the Mexican juniors is coming. FR has already snapped up FSR, and Brad Cooke of EDR has pitched a few juniors that I am aware of with takeover offers. All of these producing juniors will be in play in some form or another once they begin to get operations sorted out, and it just remains to be seen how the sharks will go after the little fish.

cheers!

COACH247
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