remember this!!, page-2

I did a lot of research as to why this company was this price. A couple / three years back they got a management, advisor mob to analyse what they should do to increase the value of the company. The report is on their web site.

In short, the advisor said 'stop digging holes to discover gold and start mining the huge stuff you say you have'.

And CRK simply did not do that. They kept digging around.

Now why would you not follow the obviously correct advise. Either you are playing some game for yourself or you have lied about that resources. So we only have a couple of choices...

Frank was hogging shares and waiting for his big pay dirt (buy out). And he really was not a gold miner.

or

He lied.

I hope it was the first option.

Now, a problem with their 4 million resources is they have used some drilling model and method that allows you to name resources, but NEVER reserves. You can read that in the annoucements on their web site.

So, I guess without reserves, you can never go to the bank and say, lend me $50mill so I can dig up $500 mill of gold. And without reserves, you dare not start a mine - you may end up broke. So, in Frank's mind, he kind of went down some dumb cheap drilling road, and he could never really mine. So he kept digging around, and hoping someone will bid for the company.

Now, I have corresponded to the new CEO, John McKinstry, telling him good luck digging up the 4 mill ozs. John was very clear. He did not want to talk about 4 mill ozs at all. And he is right. The previous CRK drilling model used says you cannot guarantee anything.

It is odd that Frank did not use a proper drilling method and model. But if you are in Frank's shoes, owning 40%, you are better being cheap and showing 4 mill resources, rather than concentrating on, say 500k reserves.

John was very positive about the approach they are taking now. And, in fact, he is following the approach that says 'let us prove some reserves and start a mine'. And he is very positive the outcome will be good for shareholders. So he is only following the independent advise of 2-3 years ago.

So, by my thinking, I am so lucky to be a Johnny-come-lately to this share. If you owned shares at $2 and $1 you were dudded. But I can see why people, even clever people like JP Morgan bought. Wow, one can see why management is the most important. John McKinstry is really good management - in my opinion.

I suspect what he plans will be true. By year end he will say 'we have +500k of mineable gold and we are going to start scraping the stuff off the top in the next year'.

I think at current prices just saying that will be a big boost to the share (as per the management report of 2+ years ago). And if Frank's funny el-cheapo parabolic resouces (but never reserves!) drilling method really ends up being right... and there are 4 mill oz, open pit minable... well, you end up with a big share price.

Now in that entire story, when you read McKinstry's comments on the recent results of proper drilling he really says 'they confirm what we thought about what was in the ground'. Well CRK said their old 'funny' method said 'we have 4 mill oz'. John keeps saying meter by meter... 'it appears what we thought is true'. I am really not sure what that all means. But I like that the reports from a concervative CEO says 'there is gold there, it appears to be profitably mineable as open pit, and we are concentrating on have a MINE ASAP.'

Mind you, John, you are a couple weeks late on your last assay results. Where are they, please?