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Gold/Mining/Energy : ISLAND-ARC RESOURCES IAR-VSE
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To: The Fix who wrote (12)1/8/1998 2:45:00 PM
From: VAUGHN  Read Replies (1) of 186
 
Hello Fix

Thanks for the reference from the KLA thread and starting this one. I don't have the time.

As you know, I agree with your appraisal of the KLA vs IAR probable leaverage to an announced find by SUF. In fact, with the market's attention on the diamond game this year, I suspect there will be speculative appreciation long in advance of drill results.

Like Walt, I am concerned with the lack of volume and small share float but with the speculative attention this play should receive over the next six months, and the legitimacy SUF lends the play, I feel a modest position should be reasonably liquid.

Be aware that coffers are not deep here and JV partners must come up with their share of budgets, so anticipate a financing and modest dilution upon any speculative fever, to top up coffers.

Lurkers and Walt should be aware that even though there are six million shares FT'g, they are actually very tightly held and come with some built in time frame restrictions. The actual number in small investors pockets is in fact much much smaller. Something in the neighbourhood of less than a million I believe. In my mind, that makes the leaverage potential extremely attractive but it also obviously has limited daily volume and in the absense of speculation will make exiting somewhat difficult.

I have been in IAR since they accumulated their 10% and hit their low a while ago but in my DD, I have not as yet been able to get a handle on the quality of management. They actually do have several geologists on staff unlike some other juniors and they have some legitimit hard rock (not kimberlite) experience but then SUF is providing that on this play.

What I have not been able to determin is if we have any Applegates in the upper echelons and I am sure that if you or any lurkers could offer any insights in this regard, the thread would be appreciative.

Regards
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