Hello Blue_Horseshoe;
I think everyone here should be interested in this posting from Musclehead on SH;
The uninformed continue to relate the KRY story to the Bre-X fiasco of years past. As part of Fidelity's
management team at the time, I was responsible for fielding questions regarding our involvement with the now
defunct organization. Those of you in the business may recall that Fidelity (Contra and Magellan funds
combined) had the largest institutional holding in Bre-X. Needless to say, I know a Bre-X when I see one, and
this is no Bre-X. The feasibility study done by PDG on the LC property underestimates the minable reserves.
The important point to recognize is that the Bre-X backlash has essentially allowed the impossible to happen.
The retail investor has been permitted to participate in a stock with incredible potential prior to the institutions.
You see the investment world is all about money flow. Currently KRY has very limited institutional support. This
is in large part due to the pain suffered by those managers who rolled the dice on Bre-X. As the announcement
becomes clear and the story solidified two forces will come into play. The institutions (looking for any hope of a
growth mining concern) along with the shorts will compete for a limited number of shares. In short, the shakeout
has occurred and the longs who remain are strong, and correctly convinced of much higher prices.
I talked with the company yesterday to clarify Bob Fung's role going forward. His decision to leave Gordon
Capital was extremely significant. Do not underestimate his ability to attract capital, and coordinate deals. The
power of his arrival will prove to be very significant. They have set the table to such a degree that longer term
this company is positioning itself to be the gateway of Latin America's minable resource environment.
The company did confirm that MO, Fung, RM and Venezuelan officials would be traveling to NY to meet with us
Wall Street types. To the best of my knowledge the boys at PDG will be at home with their families polishing off
Thanksgiving leftovers.
Rest assured I have no concern over the short term fluctuations in the metals markets. Commodities by their
nature will fluctuate. The company has assured me that the cost of production will be below $200 per ounce. In
addition, there are ways for the mining companies to use the futures markets to predict profitability. If you do the
math even at todays prices the numbers continue to be staggering.
Finally, I was told by a company official that the decision was no longer about ownership. KRY ha clear title to
the property. The final sticking point was whether KRY had the mining rights to the property through the year
2014. I confidently await the decision.
Enough for now!!
Muscle Head
With regards,Frank |
