GPXM commentary from Jay Taylor's newsletter (e-mailed 5-5-07):
"By virtue of its regular in increasing production of molybdenum from its Ashdown Mine we are now upgrading GPXM from a “B” Progress to an “A” Progress company. In addition to achieving commercial scale production, In my view, some very positive things have been happening at Golden Phoenix that are very encouraging to me as a longterm shareholder.
The company has worked out the metallurgical difficulties, including how to deal with the presence of copper in the ore. Not only has GPXM been shipping product, but according to one source I spoke to last week, it is also mining more efficiently now so that it is coming close to being able to keep its mill fully fed on a regular basis without as many costly mill shutdowns.
* Sprott Asset Management recently took down $3 million of a $6 million private placement and is holding GPXM in their new molybdenum fund. This is good news from my perspective, because it gives credibility to a U.S. OTC bulletin board company that had its credibility nearly ruined and its financial condition all but bankrupted by a prior management team.
* Management is going to use some of the $6 million to explore and develop the Ashdown Molybdenum Project. In my view, this is extremely important, because if the market can see a sizeable deposit (in terms of pounds of moly if not in large-scale tonnage), it should begin to price these shares much more aggressively. Management also expects to use some of the proceeds of its recent private placement to develop another molybdenum project it has acquired—namely, the Northern Champion Molybdenum Project—and last but not least to work on the Mineral Ridge Goldmine as well.
In my view, the market has not taken GPXM seriously for several reasons. First, the financial players in the junior mining sector are in Canada and not in the U.S., so being a U.S.-listed company rather than a Canadian listed company hurts the price of GPXM. Secondly, the past management nearly did run this company into the ground—six feet under, that is. Third, somehow the market appears to think a big molybdenum deposit in which you have to move huge amounts of earth around to produce a pound of molybdenum is worth more than a very high-grade moly deposit in which you need only move and process a small amount of rock to produce molybdenum. Typically, moly grades run from 0.05% to 0.2%, whereas Ashdown grades are north of 2% and sometimes incredibly high double-digit percentages. With its 100-tonne-per-day mill, the GPXM Ashdown Project gets no respect. But even if the average grade were as “low” as 2% at Ashdown, its 100-tonne-per-day mill would produce as much as a 1,000-tonne-per-day mill running 0.2% molybdenum. Moreover, the cost of moving and processing huge volumes of ore would in most instances be more expensive than in moving small volumes of high-grade rock around.
I’m not saying GPXM is a slam-dunk at this point in time. I have personally done with GPXM what I have suggested those of you do who bought this stock at or around $0.15 and that is sell enough stock to recoup your initial investment. Or if you wish, sell more to be sure you book a net gain no matter what happens.
Managements of companies that actually do what they say they’re going to do bolster confidence. The new management headed by Rob Martin has achieved an almost impossible task—to bolster shareholder confidence after it was all but destroyed. He has done so by doing what he said he would do. If GPXM continues to execute its business plan, I see no reason why this stock can’t be above $1.00 by the end of 2007."
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