Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Claude Cormier who wrote (35788)	3/14/2007 1:08:50 AM
From: TrueScouse	Read Replies (2) \| Respond to of 78430

CC and Mr.Aloha: Great discussion on the relative merits of DNT, CUU, MMG and ZNC. Thanks! Just a quick note regarding the "country risk" issue... I attended a meeting at the PDAC sponsored by Candente to host the CEO of the Lima Venture Exchange. DNT has recently listed there and saw a huge increase in volume and significant price increase too. What impressed me were the stats of the performance of the Peru mining indices -- up over 150% in the last year I think. Also impressive is the existence of billions of US$-worth of pension fund money in Peru that's looking for a safer home than Peruvian government bonds. There are some massive domestic mining companies in Peru and a mining culture going back 500 years. I think that any junior involved in Peru should take a good look at DNT's experience in getting its Lima listing -- and how little it cost to do it. Personally, I'm delighted to see both of you singing the praises of DNT, CUU, MMG and ZNC, 'cos I hold all of them. <g> Best regards, Howy

To: Claude Cormier who wrote (35788)	3/14/2007 1:46:33 AM
From: Mr. Aloha	Read Replies (2) \| Respond to of 78430

It is an error to believe that Peru is more risky than Mexico. It is not very much. Maybe so, but the perceived risk is much higher, and I believe that has held Candente's price back and could hold ZNC's price back, too. Here's a reluctant sell recommendation by Jay Taylor on DNT at .80 from June based just on the rising political risk: candente.com Taylor says, "the low valuation must be related to rising political concerns." Those willing to take on the risk that the "project might be confiscated either directly or through enormously high taxes" may do very well because of the apparent undervalution of DNT, but many investors don't want to take that risk, particularly with neighboring Bolivia recently announcing mining nationalization. Financing may be more difficult because of the perceived risk, and "if there is interest on the part of a major, given the rising potential for confiscation, the price the major would be willing to pay would likely be significantly reduced." By contrast, investors like Jim Puplava seek out projects in Mexico because of the relative political safety, as explained in this article, "Mexico: Land of Metals Opportunity": Message 23212541 I believe the perception by many that Peru is a much riskier place to invest than Mexico is why DNT and ZNC remain undervalued and one reason why MMG should trade at a higher relative valuation. I think the main reasons MMG trades at such a low valuation are the recent profit-taking from last year's private placement investors after 13+ million shares freed up from lockup, and the lack of recognition of their silver. I think the profit-taking is essentially done now and the silver will start to get market recognition soon as they focus more on developing that resource. Also, zinc has sold off primarily because of the market perception that the zinc market is suddenly in balance after a 300,000+ tonne supply deficit last year, when actually the pause in the LME zinc stocks downtrend is due primarily to a temporary surge in shipments from the Red Dog zinc mine (http://www.siliconinvestor.com/readmsg.aspx?msgid=23279668 ). As MMG nears completion of their mine plan and feasibility study and proves out their silver, I believe the stock will move significantly higher. With the worldwide dearth of large, low-cost zinc projects, I think there will be multiple bidders for their zinc project upon completion of the feasibility study. If the perceived political risk for Peru is reduced over time, that should also help DNT and ZNC move much higher as they advance their projects.