To: Claude Cormier who wrote (31263 ) 3/27/1998 7:30:00 AM From: Richard Mazzarella Respond to
Claude, my comment that the price was what the market would bear. You told me that you haven't followed any of the desert dirt's other than IPM. That's why you may be having a problem on the cost change for BRX. It's convoluted and there is a lot of incest, but I try to give you a flavor, my speculation. Phoenix International, a private company has Dale Runyon as a principal. Dale Runyon is also the CEO of Maxam (OTC:BB MXAM). Phoenix sold IPM it's property and used the funds to leverage Maxam. Success with IPM is extremely valuable to Phoenix as a method to provide credibility for its other desert dirt holdings. I also believed that Maxam expected IPM to provide credibility for their 74 square miles holdings. The $24MM value that IPM was willing to pay was based on their belief for the property value from reports of recovery by consultants. High value payment also conveys something of value worth investing. Helps with fund raising and stock price? The stock price was high when that deal was made, what the market would bear. The current stock price is low, is there any point in Phoenix letting IPM go belly up when it can still advance its objectives? Dale Runyon has told me a couple of times that IPM has a good property. Notice that Phoenix also took restricted shares, that suggests confidence for IPM's future. Efficient markets have the stock price reflect the speculation investment value. Why shouldn't that hold for a mine? Value for that piece of BRX was once perceived at $24MM, now $1MM. That can change at any time. I see many start-up jr. PM's pay just a few thousand dollars for their initial stake. A number of jr. PM exploration companies are down 1/5-1/10 their previous stock price. It's always what the market will bear. IPM almost failed once, the stock price reflected conditions then, the stock went to $14, and is now <$1. Will it do that again? That's the bet. I believe it will.
