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Gold/Mining/Energy : Yamana Resources INC. T- YRI -- Ignore unavailable to you. Want to Upgrade?

To: Neil Irwin who wrote (1241)	5/27/1998 4:38:00 PM
From: Greg W. Taylor	Read Replies (1) \| Respond to of 2346

For what it's worth: I'm going to stick my neck out here for a moment. I have just come across some Private Messages sent to me a few weeks ago. I'm not sure how I missed them but I'm just now able to reply. One message was from someone asking about the financing and specifically about a) why our share price has fallen from its highs of recent months and, b) the price setting mechanism regarding the financing. I think it's a useful discussion to which I'm sure others have other opinions. ===== I suggest there are a few reasons for the recent (last few weeks) pull back in our share price, one of which is the financing. A few things normally happen here. One is that some investors become concerned about dilution: the additional shares which will be issued with the financing, giving each share a smaller portion of the total pie. A second factor is that, with this issue, there is a share plus half a warrant. Because these warrants will be freely-trading, they may be sold in the market to cut the overall price of the purchase within the issue, or they can be held for later trading or, finally, as a hedge against a higher future share price. Some investors will sell in the market so they can buy in the issue. As far as pricing is concerned, it's a balancing act. Higher prices on the units mean more money for the company per unit with less dilution. However, higher prices also tend to mean -- especially in lean markets -- that fewer units are sold. Our objective is to come to a trade-off which makes the issue successful without excessive dilution. Other reasons for the recent share drop include the volatility of gold and silver prices, as well as in the market itself, the latter having little tolerance / stamina when it comes to exploration stocks. Further, on April 7, we announced that we were drilling etc in Santa Cruz but haven't released results until today. The market has little patience when it comes to waiting for results, no matter what is reasonable. Also, in this market, there are so many rumours... A year and a half ago, the euphoria was so great that people were always looking for the golden goose hidden under each portfolio. Good-news speculation was rampant. Today, the opposite is true: people are assuming the worst and finding it, even if it isn't there. If you don't release quickly enough, the assumption goes, you must be hiding bad news. If your news isn't far better than the last news and beat all expectations, then it is seen as bad news, especially by those who are looking for the great "overnight success." One more major factor is the play: A lot of players, Canaccord-types, for example, are jumping on news, riding it up, then selling at either a gain-hit or a stop loss. They can ride these waves and make serious money in a matter of hours, money that is generated by their own strategy as a kind of self-fulfilling prophecy. Generally though, for this to work, you should have some serious funds and pretty good nerves. Today, for example, you could have made about 20% on your money with proper timing. In better markets, the price won't react this way because people will have more faith in the market and will be looking for the longer term gains, for now, they are taking profits when and where they can. Sad, but true. Things will change. They always do. My forecast is that we will see a turnaround by the coming fall, both for Yamana and the markets. We'll see. If you want to talk about any of this or any other issues, you can post on SI, call me toll free at: 1-888-809-0925 or email me at: gwtaylor@yaman.com Greg