alacer and fml?? australian newspaper, page-30

Hi Gutumike.

I said your stance on the pog was a gut feeling not a wild guess, and your "definite possibility" doesn't make it any less so I am afraid. We can do all the research and due diligence in the world regarding factors driving the pog - and I have probably done more than most - but at the end of the day you still can do no more than go with your gut feeling, because in my opinion there are powerful agenda driven forces in play manipulating world finances including pog, and until this massive game is played out to its desired conclusion, we - and I mean all of us - can only take an educated stab at the outcome, and that, in my opinion is not an intelligent or business savvy reason for unloading millions of bucks on acquisitions (struggling or not) which could be better utilised discovering what is under Treasure Island and other tenements already owned, until we finally know which metal, or choice of paper currency the worlds finances will be pegged to, and at what figure the pog finally looks to be steady at within a small percentage up or down.

Will they buy a struggling operation?
Going by past performance almost certainly in my opinion.

Focus bought CRE which was a struggling operation.
Shandong bought the lions share of Focus, which were two struggling operations (Koolgardie and Laverton)
I don't see Shandong/Focus buying anything differently, because I believe - as I have posted before - that it is the land, and what is beneath it which is more important to China than the profitability of the Company which owns it, for reasons which may become clearer once global finances do.

Where do I stand on the pog?
Where I have always stood for over two years.
I believe with all things made privy to me through public and media information, that the pog HAS to reach levels hitherto unheard of, and have said so several times, but just like everyone else I can't possibly know for sure, and even more pertinently where acquisitions are concerned, no one can know for sure WHEN this may happen either.

So here is how I personally see it.
If Shandong really are the passive partner they insisted they are, and Mr Haig and his Focus Board have control of when to acquire another operation, then I would be amazed if he didn't exercise constraint for the foreseeable future, having relied unsuccessfully on the pog in the past instead of attaching more urgency to reducing production costs. Its not as if substantial reductions in costs were not impossible as a new recruit very quickly pointed out, albeit a bit late by then.


If, conversely Shandong are already calling the shots(and the sentiment on here lately seems to imply they may be) then I believe there is a very real chance that an acquisition is imminent for reasons already opined above, and if the pog stays stubbornly within its present parameters or lower, effectively making production/revenue an unprofitable no brainer, then another debt call within twelve months will probably have to follow.

My simplistic mind tells me which scenario I would prefer, because for what its worth I can see no justification whatsoever for taking a huge gamble on believing a pog rise is just around the corner waiting to embrace and reward those that dare, when such wanton haste in STILL trying to be too big too soon is absolutely not necessary right now.

Shandong/Focus can sit comfortably for many many months in a financial luxury afforded to few others in this uncertain time of gold spot price, and surely a far more prudent and sensible alternative would be to adopt a wait and see approach on pog whilst busily proving up extra resources at TI and other tenements in anticipation of a much improved pog in the not too distant future.

If, unfortunately on the other hand it takes another two years from now for the pog to return to sustainable mining levels and beyond, Shandong/Focus will be one of a very select few mining Company's still in business and there will be a whole plethora of abandoned mines waiting to be reworked and made profitable for next to no outlay at all, making history repeat itself.

As always all the above my opinion only and not intended or meant as being advice to be acted upon or factually correct.

Good luck Gutumike!