Hi Goldenbug,Sorry that I haven't replied to you sooner but just...

Hi Goldenbug,

Sorry that I haven't replied to you sooner but just after I posted on Friday I had to leave for an overseas trip to the US.Arrived earlier today hence the delay.

Anyway you're probably right I do have a very biased view towards IGR but as a major shareholder in any company that is only inevitable and reasonable in my view.If you believe in something whether its a company,an idea,or whatever usually people show some sort of passion towards that.But even though I'm very enthusiastic towards IGR it doesn't mean that I can't see things objectively and I do acknowledge that there are downside risks.Thats the nature of investing and I've had to exit companies I thought were going to be winners but saw the writing on the wall.

I think everyone knows the upside to IGR so what are the downside risks.

1.Wall Street experiencing another major correction.

You mentioned a few more nights like the other day but a few down days won't bother IGR as was shown yesterday.The SP bounced off 45c(just above where I thought it may retrace) and finished at 47.5c which is a sign of strength.The move from 36.5 to 54c is 17.5c and a 50% and 38.2% retrace is approximately 45&47.5c respectively.But then again thats only one days trading so its to early to tell where the SP will settle over the next 1-2weeks before more news flow.
You said weak hands could sell down IGR.Well since its broken out above its all time high(28.5c) these "weak hands" have been met and dealt with each time by a much stronger demand for IGR that we are now seeing.When the SP sold off a bit the other day volume noticeably dried up.
When I arrived in my hotel room I turned on the TV to see the DOW down by about 40points and then in the last half hour or so it had climbed another 70-80points to finish ahead for the day.It keeps getting bought on the dips and probably will do for a while yet.

2.POG reversing its upward trend.You said "Gold will also retreat if there are not further rate cuts to undercut the USD".Well the market doesn't seem to support that view as gold blasted through $800USD to close around $808 and in AUD terms is now at approx $874 which is $20 higher than last week.
Gold will have to correct at some stage but when it does it will probably find support somewhere in the $770-$800 range if this move continues up to say $840/50USD.
A lot of money is now moving out of the USD,and to protect against inflation and also geopolitical uncertainties gold I feel will be strong for a while yet.A number of people are predicting that it will rise $1000USD which is quite possible.

3.Discoveries Dry Up.

Lately we have been getting good drill result one after another and everyone(including me) is I think expecting this to continue.I have a lot of faith in their geological expertise and as I have posted they are doing that much drilling following up their prospective preliminary surveys that the law of probability is now tipping in their favour.But then again if Red Dale is not what they thought it could be then this will probably put some downward pressure on the SP.
Remember though that SC is a fantastic 'blind' grass roots discovery located in an area of no previous known gold mineralisation and management feels strongly that a number of other similar anomalies may also come up trumps.They rate SC type discoveries as rare and is on a par with the Tropicana Project(Anglo Gold&IGO) and Thunderbox(Lionore).Its no wonder that IGR is receiving a lot of attention of late.

4.Costs Increase.

Rising labour,material,plant and equipment prices together with shortages for skilled and professional labour.These are real risks however they now have a plant which has access to grid power thus allowing for cost savings and have just hired a Project Manager with 20yrs experience.And they have purchased accommodation for 140 miners.

5.Delays in the Resource Estimate Update.If this is pushed out to say Feb/Mar instead of by years end as promised could also be detrimental.However thats why they have taken on a Project Manager and when I spoke with Peter Ironside he said that the feasibility study and resource statement is now being worked upon in tandem with the drilling program.They need to get this right so the size of the plant is neither too big or small for obvious reasons.In the Mining presentation on Friday in Brisbane CC said they are aiming for 120,000 ounces per year.If RD is a winner I imagine this could change.

You talked about what IGR is going to do with the increase in the SP,possibly raise cash.Well I think everyone knows that this will happen as quite a few people have been posting of late.I think someone said that having talked to CC he said that there would be another Cap raising after the RD results were announced.Sure they have to raise more money which causes some dilution but with the SP so high now they may be able to do it say at 40c and only have to issue 20-25mil shares for $8-10mil.After that it could tie them over till they finally approach the bank with their bankable feasibility study.
And I'm sure there will be lots of keen investors to add to their holdings.When a company gains momentum like this I don't think a cap raise will be SP negative.Like a number of people have said,I'm happy with a cap raising as they are finding more ounces.

Now you said "I think everyone is in la la land at the moment flagging 60cents and then $1".As far as I'm concerned I have said that we could reach 60c in the near short term(maybe in the next week or two)and possibly $1 by years end but realistically $1 probably won't happen for a while yet.But then again the company has been been materially undervalued for quite a while now and whats happened in the last few weeks is just catch up in my book.They say shares are undervalued or overvalued approximately 70% of the time.I also posted that maybe at 54c this could be a short term top.But predicting where the SP will be next week,next month etc is almost impossible.The trick with trading and investing is to react to the movements as they happen not so much predict.
As a long term holder it doesn't worry that much as far as day to day to fluctuations go.But I'm only human and hoping for more good gains with the knowledge of what the company is doing is only natural.But I balance that with a mindset that says if that doesn't happen its not the end of the world.

A few broking houses and analysts had valued IGR at 44c so at 47.5c its pretty close at the moment and they haven't accounted for some of or none of SC,so 60c is not out the question.And yes I do feel IGR is fine with a market cap of approx $148mil.

Yes people and myself included are getting very excited about the recent SP moves and of course we want more.I know Kojasper,Sprintt,LSM and many others have been in IGR for a long time now so its only natural that we are getting excited with what could potentially happen to the SP.And like I have said a few times before,the "wild card" in South Australia with Barrick is not factored into the SP and is eagerly awaited by CC and everyone else.CC told me that Allendale had a gravity reading which is approx 30 times that of Olympic Dam.It may well come up with nothing but it will certainly be cream on top of the cake if it surprises and support the saying that when it "rains it pours".

Anyway Goldenbug I'm glad you have a conservative approach and mindset at the moment(or maybe thats you in general) because it makes you think a little more objectively.However I'm still quietly confident.

Next week will be interesting if the POG continues to rise.Unless we get some news I don't expect it to go higher than 54c and a bit of consolidation is probably more likely.Back home Tuesday.

Cheers
Tigerpen8