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

To: robnhood who wrote (65684)	6/14/2009 11:12:04 PM
From: Earlie	Read Replies (3) \| Respond to of 78414

Hi Robnhood At this end, the word "promoter" does not have a bad connotation as every publicly-traded company needs to ensure that investors know and understand its "story". That said, over the years, investors have lost tons of dough as a result of ruthless promoters who skirted the truth to achieve nervana..... stock trading "momentum". To counter this time-honored practice, particularly in the mining sector, the exchanges have mandated 43-101 reporting. A 43-101 report must adhere to strict reporting codes and can only be written by a person who is qualified to write such a report. When submitted, 43-101 reports are carefully scrutinized by exchange-employed experts. Transgressing 43-101 requirements can result in a stock being de-listed. It may not be perfect but 43-101 reporting requirements have indeed cut down on "promoting abuses". To my mind, the Ventana-Greystar situation may become one of those classic "case studies" that a future professor will cite to his class to illustrate the importance of 43-101 standards. Here are a few observations that underline the point. Ventana has drilled well in excess of 100 holes, yet it still has not published a 43-101 "resource calculation". I wonder why. Yes, a certain "analyst" (and I use the term rather loosely here) has sprinkled "moon dust" in his Ventana commentary (perhaps to assist his firm to secure a near term Ventana financing) but note that this is not a 43-101 report (if it were submitted as such, it would be torn to ribbons under 43-101 scrutiny). Greystar has published 43-101 reports regularly. Ventana's strategy is both obvious and clever. It bought a property adjoining Greystar's Agnostura. Greystar has spent over a decade drilling its Agnostura property to the extent that it is now a "proven" category deposit. A well-known adage in the gold exploration game states, "If you want to find gold, look where it has already been found". Ventana's acquisition of that property sure pays homage to that statement. Through the simple expedient of accessing Greystar's drilling maps, one can see where particular gold vein intensities have been drilled right to the edge of the Angostura property line. By carefully locating its initial drilling sites right up against the Angostura property line and by aligning those early efforts with the above-noted vein intensities, Ventana was able to assure early drilling success. Clever indeed. Interestingly enough, rather than now spotting drill sites widely across its property, Ventana has chosen to move the drills out only incrementally from its early "property line" drill holes, which should ensure continued decent "drilling results" Ventana's investor relations folk like to suggest that Ventana has "better grades" than does Greystar. They cite Ventana intersects that exceed 5 grams per ton whereas Greystar has average results that are only slightly above a gram per ton. Of course that comparison is absurd. Comparing an average grade for an entire property with intersects is "misrepresentation" to say the least, but if investors are chasing momentum, who cares?. As an aside, Greystar has well over 100 holes that produced intersects that exceeded an OUNCE per ton. Then there is the local topography. Greystar is developing an open pit mining situation. If one examines the topography that Ventana is exploring and additionally examines Ventana's drill hole depths, it is difficult to conceptualize Ventana being able to mine other than underground. To be economically feasible, Ventana's grades would need to be much richer than those of Greystar. So far, this does not seem to be the case. Greystar's lack of interest in this property may well have been based on this factor The comment that "Greystar's deposit is not economical to mine" is not upheld in the feasibility report. Indeed, the anticipated open pit mine is expected to enjoy an excellent stripping ratio solid oxide/sulfide ratios and rather low production costs. See the published report for details. The most telling comparison relates to the progress made by each company. Greystar will conclude its feasibility study in the near term and has lined up The World Bank (IFC) as a lending partner. Ventana has years of drilling to finance and complete before it can decide whether a feasibility study is worth doing. In spite of this situation, Ventana's market cap is well north of Greystar's . Talk about a mo-mo play. Greystar has recently published early drill results from another of its properties. Those rather significant results were ignored, most likely due to the glare of the Ventana stock blast-off. If Greystar's new property adds recoverable grades to an already proven 15 million ounce deposit, this wouldn't be shabby. Even better, the newly-drilled property is located in close proximity to the company's planned rock dump. A returning truck heading back to the mill with a "back load" of ore would enhance project economics significantly. Ventana's stock has been on a rocket ride over a short period of time. Examining the published results and doing a bit of homework does not provide comfort with respect to that ride. On the other hand, Greystar's stock has been "plodding" by comparison. Indeed, GSL's stock trading over the last several weeks, particularly the closing trades, provides evidence that someone is trying to hold the stock price down (smacking 100 share bids at the close is not "normal selling", especially when it occurs almost every day). This suggests to me that a certain brokerage house hopes to offer Greystar a "bought deal" financing. I suspect that Greystar's management is aware of this activity and I hope management responds appropriately if so approached. Of course I could be wrong and this activity might simply be a prelude to a bid. Time will tell. Best, Earlie