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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: jrhana who wrote (25816)	12/21/2003 9:20:06 AM
From: TheSlowLane	Read Replies (1) \| Respond to of 39344

As it happens, I had an e-mail exchange with EDV touching on these topics at the end of last week. Here's the pertinent part of the response from EDV: "...although we do not own hard assets (i.e. an operating mine), the value of the Company is derived from intellectual capital. It is true that we make our money by investing other mining companies; however our investment strategy is such that we invest and partner with aggressive management teams where we are able to add value. Our investments are not passive. We have very close relationships with our investee companies, and we assist them in furthering their strategic initiatives. In this sense our ability to continually generate earnings is contingent on our management creating deal flow. Our operating results over the last two years are evidence of the fact that management has the ability to capture investment opportunities ahead of the majority of other market participants. We have several reasons for not disclosing a detailed list of our investments, some of which are listed below: a) We are active investors and our positions change fairly frequently, thus any list we provide would quickly turn stale. As evidence of this, during fiscal 2003, we bought and sold over US$51 million of investments based on a start of the year capital base of US$24 million. b) If we disclosed individual positions, we could be “tipping our hand” and potentially disadvantaging ourselves in the market place. c) And most importantly, we are seeking to protect the relationships we have with the companies we’re investing in. As shown by our capital turnover – we are both active buyers, and therefore, we are also active sellers. Our decision to sell one position might not fully reflect our outlook for that company, but rather a decision to reallocate capital for other business reasons. Or, we may be selling simply to prepare to re-invest. Therefore, discretion is needed. While we are short on specifics, we have disclosed that we have been actively involved with Wheaton River, Northern Orion, Bolivar Gold Fields, Glencairn Gold Corp, to name a few. At present, approximately 2/3 of our investment capital base is currently deployed in larger, “merchant banking” investments. The balance is currently invested in smaller equity positions – approximately 20 to 25 individual positions."