re: News: Focus Minerals Corporate Profile Vi... Reiner, you...

re: News: Focus Minerals Corporate Profile Vi... Reiner, you said "Why did they bother"....then you nailed it with your other comment I believe...."regarding Nepean, resource ramp up at Tindal?s etc and TI results". I believe these guys are going to time either a single (whammo) style release or a tight but steady series of releases regarding all their resources e.g., Tindal?s, Nepean, TI etc (not necessarily in that order). I certainly wouldn't want to be caught with my pants down when it happens. Day traders have had a field day with this stock and if I'm right you will see the big bang re rate finally above 15-20 cents almost instantly. Noticed a package of 1.5 million go through at 7.2 cents this morning in one hit, well done whoever that was. If the DT's manage to pick up some down to 7 cents good on them, weak hands to strong hands, but remember, May is almost over girls and boys.

From a business point of view: Campbell and co have got themselves into an interesting situation. The cap raising was an excellent decision. Basically it guarantees cash into a climate that will be extraordinary good for PM's, but not necessarily good for funding of new projects/companies when the shit hits the fan. Timing here was excellent from my point of view, if you really want to seize the moment from the outset. I would hate to see our company sitting on a resource but unable to get $$ to explore it let alone exploit it, in an unfavorable financial environment where everyone is running for the bed covers and stashing their hard earned into their pillow cases. Whilst some might say?. ?If the dollar tanks it will be good for gold?!! Yes this is true but it won?t happen overnight (midterm adjustment required), just look at the state of the current Aussie Goldie?s, why are they still going backwards??? Answer: Sentiment is lacking I believe. Remember the uranium buzz a few years back when every man and his dog were listing IPO'S in the glowing stuff!! What happened to all these companies? Well most of them never got off the ground, including many with excellent management and funding. Why? Various reasons; including but not limited to:

1. Their timing was too late. In today's rapid fire (high frequency) markets inclusive of quadrillions of fake fiat looking for a short term home (emphasis on short term), as a company you really need to be in the right place at the right time to take advantage of this available coin. The uranium bubble was a good example of this; it came and went very quickly. It's happened before with gold and it will definitely happen again, I can smell it, its close. FML will capitalize big time when this occurs.

2. Another reason on everyone?s minds is sovereign risk, just ask all those invested in NCM about that recently re: their Bonikro operation located in the central-southern portion of the West African nation of C?te d'Ivoire (OUCH). FML will at the most have to deal with GOVT tax in some form or rather. Also worth reflecting on the latest developments in Namibian policy for uranium explorers; there is banter over there about government putting their hands in the honey jar.


Most investors these days have a very short term memory. They remember the catastrophe of 1987, tech bubble, housing bubble, CDO's etc. People are unwilling to place cash long term anymore into anything other than real estate. I recon you are now looking at an intergenerational society that lacks any idea of precious metals. No one is taught about them at university level Econ101. All you get is bell curves and garbage about supply, demand, free market equilibrium theory etc. No one is teaching the truth about real money. The people who are into stocks these days are generally bargain hunters, sitting on their hands waiting for a pending collapse so they can swoop in and buy the bottom, or blue chip (safety in dividends) investors. To a certain extend you cannot blame them, that's what happens when countries abuse their currencies and print the be-Jesus out of it.


FML has in effect made itself unattractive to a takeover bid to this point because of the large amount of shares on issue. I have worked for many majors over the years and have been investing in the PM scene for a while. Personally I am glad we are unattractive at present. The last thing I want to see is a premature take over where we will get minimal gains as investors. I also know that small cap companies are much more efficient when it comes to resource management, why? Because they have to be, period. They explore, develop and bring to market deposits much more efficiently than the majors. Less people + less politics + less waste = faster (and usually happier) decisions.

Setting up contracts for exploration etc prior to a downturn is a good thing, basically means it's budgeted for, no debt required, no hedging required. If economically things about face and there's no meltdown (up) drama then we are still set up to benefit; basically next project please. Hopefully it involves a blue and gold colored elephant at TI (I?d like to see a bit of chalcopyrite copper thrown in just to extend the meaning of FML (focus MINERALS ltd).

I doubt we'll see major cap raising for a while now as things get set for the next phase. We have the management, the location(s) and resources, the infrastructure, the market climate and now all we need is the SENTIMENT.

Only issues I can see: higher fuel costs, Aussie dollar to high (but going the right direction at the mo), wolves at the door under 50 cents (that will really piss me off as a LTer), maybe environmental license issues? If anyone has any idea about the formalities for licensing regarding mining on salt lakes I?m all ears. I have worked on gold mines that do it but are not sure of the agreements/bonds etc that were put in place, as when I worked there they were established mines.

For newer people to the forum deliberating the idea of investing in precious metal companies/bullion etc , here are some reasons why I think it?s a good place to be. And for the old timers that need a confidence refresher:


? Global gold production is decreasing at a rate of approximately 1 million ounces per year. Even with technological innovation and modern mining methods, many professionals believe that gold as a finite resource is becoming increasingly scarce. Collectively the worlds mining companies deliver around 2000 tonnes of gold to market per year. Less than 200,000 tonnes of gold has been mined in the world?s modern history. Most of this gold still exists in locked up stored reserves; only about 15% is used within industry processes.

? The global market for precious metals is tiny in comparison with other fiat currency, equity, and commodity markets. To put this in perspective around 1 trillion US$ of physical gold currently exists in the world for potential trading (although most of this gold never sees the market place). Whereas, roughly 2.1 billion shares worth roughly US$87 billion are exchanged daily on the floor of the New York Stock Exchange (NYSE). There are currently around 2,805 companies listed on the exchange (September 2008) with a capitalization of nearly US$20 trillion. Staggering figures when you consider we are not including the rest of the planet and every other commodity traded.

? Central Banks have become net buyers of physical gold from 2009-11 as opposed to sellers in up to 2008. They include the Reserve Bank of India, Sri Lanka, Mexico, Bangladesh, Russia and of course China. Both Russia and China have also shown interest in continued bulk purchases; if buying at this level continues demand will very quickly outstrip supply. This buy signal has put a new floor in the price of gold; the days of $1000 dollar gold are over.

? Major gold mining companies with hedge books have publicly announced their intentions to purchase gold on market to satisfy their hedging contracts enabling them exposure to increasingly higher spot prices. All the majors are now unhedged.

? Within the last 12 months, for the first time in history there have been accounts of backwardation on the COMEX (gold futures exchange). Backwardation occurs when the current market spot price exceeds the future delivery price of an item, in this case gold and silver. Several law suits are currently being filed in relation to claims of manipulation of markets regarding PM's on global markets also.

? There are signs that some big physical plays within the gold investment sector are starting to occur. A recent University in Texas made a 1 billion dollar purchase. This will continue.

? Demand at the little end of town has also increased, with a recent announcement from the US Mint confirming this by stating they had run out of 1 ounce American eagle coins for public sale. Apparently their gold inventory has been depleted to the point where they will not be minting any for another month. In fact mints around the world have limited availability of physical stocks on the shelves due to increasing demand.

? The traditional months for increased global gold sales are September through March; the Indian wedding season falls into this frame. India is the world's biggest consumer of gold, primarily in the form of jewelry and investment among its billion-plus population.

? The Communist Chinese people have never been allowed to purchase precious metals for private ownership. In the last 18 months the Communist party has promoted, a nationwide advertisement campaign encouraging their 1.3 billion people to invest in gold. A little known fact today is that since 2007 China has become the largest gold producing country in the world. The Chinese are also the largest holders of US$ debt with over US$1 trillion in long term US treasury bonds. One can understand their desire to diversify into other hard assets alternative to US$.

? Precious metals are seen by many as a hedge against inflation, not necessarily as means of investing to create wealth but a means of protecting it. The continual quantitative easing programs of governments as a response to the liquidity problems from the fall out of the Global Financial Crisis (GFC), has many economists concerned. There are multiple perceptions out there predicting high inflation, stagflation, hyperinflation and even some cemented in the deflation camp. What is known is there is a high level of anxiety that exists because people are unsure where to turn regarding wealth creation and protection. Precious metal prices will benefit from this paradigm.

? The recent joint Government - central banks money printing (quantitative easing) or stimulus packages, have yet to have a full bottom line impact on the inflationary figures of those nations participating, there is a lag time of usually 2 years. Money was originally backed by gold and silver. Governments were limited to how much money they could distribute by the size of their precious metal reserves. The two oldest currencies presently in global circulation are the British Pound (?) and the United States Dollar ($). At its inception the British ? used to be backed by silver, in fact this is where the term Pound Sterling came from. Likewise the US$ was originally backed by a gold standard until eventually it was fully floated on international markets in 1971. Since becoming fiat currencies both of these units of exchange have lost over 96% of their original value as a result of the amount injected into circulation.

? President Obama recently signed an agreement in the USA to ratify a health care reform bill that will have an immediate cost to the American tax payer of 1.2 Trillion US$. The combined US deficit currently stands at around 14.2 trillion US$, not including - bonds, health care, OTCD?s, and insurance levies (amongst other things). In a nutshell every household in the Unites States owes around US$440,000. The current easy money policies of the United States Government, coupled with high unemployment figures, multiple bank failures, record levels of housing foreclosures, and super low (near zero) interest rates are continuing to expand a future inflationary bubble. Since his inception (less than 3 years) Obama has increased the US deficit by more than all the combined presidents from George Washington to Ronald Reagan (200 years). Do the math.


There are a lot more benefits than these points as I am sure contributors? to the forum will enlighten us on. In the meantime, Thursday is a good day usually, so heads up, onwards and upwards.