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Gold/Mining/Energy : Naxos Resources (NAXOF) -- Ignore unavailable to you. Want to Upgrade?

To: Kurt R. who wrote (13888)	6/25/1998 10:47:00 AM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 20681

It was not by intention to bore you with an argument about semantics. But you were the one who started arguing about the use of the word hindsight instead of dealing with the substance of my post. The original question was about the $250,000. My point was that companies spend money on research and some times come up dry. This may have happened with J/L. The decision on wether to criticize the company for such a loss needs to be made on the basis of analyzing the soundness of their original decision to make the expenditure and their handling of subsequent decisions regarding future expenditures. When the J/L process was first demonstrated for the company it showed very good results. On the basis of these preliminary results the company entered into an agreement with J/L to further analyze the process. They acquired this option for $250,000 and secured the rights to have Ledoux analyze the deal. I think making this investment was justified at that time and getting the Ledoux sign off turned out to be an excellent move. The bad part of the deal was the back end where JJ got voting control of J/L's stock which is what was the subject of Jay Taylor's report. But I have no problem with spending $250,000 to acquire the option and to analyze the process. And how did the company handle subsequent decisions on further expenditures? When questions started cropping up about the inconsistency of J/L they renegotiated extensions in the option at no additional cost. When there continued to be difficulties they got John Norton involved with Dr Johnson and Ledoux. The result of this was the decision to deemphasize J/L and prove up a conventional deposit. I applaud this decision and believe the company handled this decision extremely well. So to sum up. I believe the original decision to invest in J/L was reasonable. I believe the follow up was handled very well. I believe the back end of the original J/L agreement was bad. But the problem in the back end of that deal was not that it indicated problems in the J/L process but that it highlighted problems in the then management structure. Focusing in retrospect on the expenditure of $250,000 is missing the point of the context in which it occurred and subsequent actions. Henry Btw I am personally disappointed you do not wish to continue to debate the semantics of the word hindsight as I had an example all ready that would have annoyed Neal.