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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: Proud Deplorable who wrote (12653)	6/4/2006 8:12:17 PM
From: E. Charters	Respond to of 78417

cooberpedynews.com.au janesoceania.com One thing I will guarantee. If you find a good business in resources you will never be able to raise a public dime for it. And perhaps you shouldn't. Good businesses minimize capex and that makes them perceived as small. In addition if they are that good, they should initiate the smart guy greed factor. The value of the intellectual property rises as the business gets harder to sell or explain, so it obviates widespread participation. Probably also so does the security and profitability. If you need to do a feasibility, then the investors do not understand it, and probably in that case are not the most deserving. Also if it requires that much number crunching, it may not be profitable and probably has high capex. Most resources opportunities are engineering or operational design plays. In other words, and this makes them really hard to explain, the approach to the extraction, mining, exploration and milling is what makes them profitable, not the resource in and of itself. Mines are made not found. this means if you honestly try to sell the property to an investment group, they will never be able to figure out why you can do it, and someone else cannot, for instance a major mining company or the last five concerns who failed to make it there. In other words if you have to sell a property that has never been drilled, or you have to lie to keep it simple. If you cannot do that effectively, or at least be able to lie to yourself, your ability to raise money in the mining world will be severely constrained. If a mine is feasible it will be apparent to an experienced engineer upon inspection, but not provably so. To prove it you have to do a feasibility. Which for small orebodies is way too expensive. If you have to drill it to 43-101 standards to mine any ore, then the cost to do so will make much ore unecnomic. It would probably pay int the case of small mines to mine ore upon the least inspection possible. In other words try to mine much structure on one or two drill holes until you have a method of guessing at the value that requires the least development and exploration. This means you will mine the most ore, the most ecnomically eventually. I know an ore deposit that by inspection is probably profitable. People who fear to lose money on it, require that almost 20% of the required capex be spent on the body to find out with other people's money (with low reliability as scale factors prevent probable predictive confidence) to see if the ore is ore. This is self defeating. If you add to that, that the mecbanism of attempting to mine the body, even if unprofitable or break even would facilitate a public vehicle, allowing money to be raised in a rising gold market, -and- this would enable an equity exit strategy that is probably maximal return anyway, -- it is totally illogical NOT to invest in this as a total risk venture with no preliminary work. In fact the risk is 0. That people would not do that can only be written off to comfort with present money, or lack of faith in investment processess in general or specifically. In this case, we can see that too much deliberation to qualify a resource in small cap resource company building is self defeating as it prejudices equity value unfairly too soon. EC<:-}