Taken from a Regency Mines newsletter Ram ResourcesIt is...

Taken from a Regency Mines newsletter

Ram Resources

It is probable that the market was looking for exploration results on the existing tenements, not news of Ram acquiring more tenements. But this is still good! Ram has been working with one of the blue chip Australian brokers who would like to support them and raise money. This broker has done a lot of its own research on the Fraser Range, and they have a map with a red line around it which includes the areas that they think should be considered part of the Fraser Range exploration province. They will, we believe, support any land banking within that area. Ram’s five new tenements are within the area and along strike, totalling 163 sq km. The deal is, to my mind, an excellent one: $40,000 now, $40,000 later, and $50,000 dollars for each of those five tenements Ram decides within a two year period to take. Given that the mineralisation indications on these tenements are quite good, and that it diversifies risk and potentially opens a new sub-area, this looks very cheap when set beside the market capitalisation of Ram.

I think if matters proceed with this broker (which we will know shortly), then Ram will become something of a favoured son. They will no doubt back the acquisition or joint venturing of a number of other prospects within the Fraser Range, with the objective of making Ram a major player. After all, they don’t make their kind of money from $1-2m placings, but from $100- 200m placings. Fraser Range is a blue chip area and if Ram can establish Blue Chip relationships in Australia, that is better longer-term news than anything. The truth is that small companies such as Ram always face the danger of drilling one or two holes early to please the brokers and the public, when the statistical probability of a good result on such small-scale exploration is going to be much less than from a better funded, more considerable effort.

We have the right to be on Ram’s board, which we haven’t exercised. Partly, this is because we feel very confident in the management, who keep us fully informed. Secondly, it is because it leaves us free both to comment in an uninhibited way on the prospects (as we’re doing in this moment), and to buy and sell stock without being bound by director restrictions. A lot of our stock becomes free to trade at the end of this month and if there is a placing we may keep our shareholding up by converting some of our carried interest – say from 20% carried to 16% carried, giving us another $200,000 of immediately tradable stock. That said, we can only trade if the volume is there, and the volume is only going to be there if Ram widens its share ownership and increases its size and activity.

Let us remember also that we have a royalty on the tenements we put in, as well as our retained interest in Ram itself. Likewise, it is interesting to note that Mark Creasy recently sold his retained interest in a similar Fraser Range company in a deal worth approximately $188m.