Sorry for the deceptive heading of the post, but as most of the...

Sorry for the deceptive heading of the post, but as most of the thumbs up posters and long-term holders would have me on ignore by now, I thought even that might get them to read this.

Here’s a little comment that comes from one of the industry groups (Diamond Drilling for Mining & Mineral Exploration) I follow on LinkedIn.

The following question was posted by an employee of Sandvik Mining and Construction. He asks “With the slow pace of the industry, I would like to understand how you keep yourself engaged in slowdown time.... appreciate your responses in advance”. An engineer replies, “Here in Brazil is the same thing. The major companies have only 45% (medium) of the fleet working. Talking to some chairmen, I heard that the option is to make investments that allow better control and production in order to reduce costs. When the crisis comes, drilling is the first to suffer. When the crisis goes, drilling is the last to start.”

The comments on their industry are a fantastic gauge to how things really are. An analyst sitting in a CBD office is “reactive” in how they establish their ratings. As I have suggested, ring a few drilling companies and see really how things are. Join some industry groups and post a question yourself, but step away from the thumbs up posters on this forum to get a real picture.

The company Longyear has been many things over its history. The present company, Boart Longyear will obviously be different and evolving into the future. But, if present market conditions continue, it’s not a matter of “if”; it’s more a case of “when” will they come to the market for a CR. And it will all happen in the shadow of maturing debt and low revenue figures.

They dynamics of the operating environment that BLY now finds itself have shifted, much to the favor of the small professional independent operators with low overheads. Costs are king at the moment and we are seeing a tremendous amount of downward pressure on pricing, from all players in the market. For a company that borrowed and increased their debt to replace and grow by 80 rigs a year, to now having most of its fleet parked up, has not turned out to be as a sustainable model as Mr. Kip once thought. Not doing a CR when the board was changed was a mistake, not going to the market at the AGM, was a missed opportunity. To go to the market latter in the year, when things will be progressively worse, is just stupid.

Mining and exploration company’s capital raisings are now at 20% of their peak in the 2H2010. Yes mining will continue, and just as guaranteed in this present environment, is BLY’s continued falling SP.