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Scouse,

I am of the view that it is our tolerance for risk and trading aggression that determines whether we make a return and the time frame in which we operate. Buy cheap and buy and sell along the way.

We have to consider the stock potential in terms of grade, volume, ease of mining operations and extraction processes. RIM is large scale, emerging bonanza grade, cheap to mine with open cut and has considerable silver credits, not to mention platinum. The story has not got out yet and there is insufficient development for fund managers to be involved who are currently risk averse in gold and who are following the network line. So who are the players – brokers, banks and sophisticated investors at this stage are potential sources of capital for development. Shareholders may be offered a sniff or takeover is another prospect. This stock is now priced for low entry, not short term return IMO but with huge upside potential.

With speculative precious metals stocks, I favour capital growth during development stages and back more than one stock. Most speculative stocks are explorers, and I have always taken the view if they hit it, it will take three to five years before they produce. This time frame does not suit most people but I feel if the fundamentals are sound it’s time to accumulate at the cheapest prices and trade it along the way. The ebb and flow of prices will reflect the company’s perceived asset value, the organisation of finance, plant, machinery and personnel as the firm moves towards production, together with new discoveries. It is during this period that I take money off the table using technical analysis in order that I can be free carried.

The production time frame usually begins with high start up costs, depreciation and write-offs; and capital growth tends to stagnate as dividends are not usually forthcoming. On the other hand, takeover conditions may exist to increase capital growth or a sensational addition to resources.

Yes, I have had my disappointments with Integra and Silver Lake to name a couple of stocks, but I bought these stocks cheaply when they where emerging and at the bottom of the trade cycle. They both made the top 200 and their management styles were poles apart, but they both died in the ass in the declining trade cycle, one obviously more than the other.

What is different about RIM in particular, is that prudent management shifted focus to gold from platinum with the fresh discovery of gold and silver. So it has to be considered in time frame terms as a new venture, which is striking it rich. It is true that RIM’s share price has not gathered pace, but it has held up very well given the global turmoil unlike other goldies. This is the bottom of the trade cycle in precious metals IMO, so many people have lost heavily in the sector and do not have the appetite for speculation. How many of the perceived better specs have had their prices decimated due to global events and had their shares diluted with constant capital raisings and unfulfilled promises yet paid directors high fees and squandered money with aggressive drilling campaigns which didn’t time the market for product? Some directors have sold shares due to margin calls - I could go on. This profile does not fit RIM. All small companies have to have to convince capital providers of their business plan for a return on their investment in tough times. RIM is pretty well endowed and gaining a clear head for business. Exciting times ahead. Any capital raising will be justified by results which will enable RIM to prove up a multi-million oz resource.

So it is a time for accumulation rather than a quick return. The timing is now right IMO. The AUD has fallen, we are losing the carbon tax and the gold price is sneaking higher. They also tell me importers of bullet primers are having trouble being supplied. Maybe copper and nickel will jump too, if further world conflict is on the horizon which could also benefit other stocks. We are living in troubled times which will be good for gold but bad for humanity.