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Mining Exploration, Development & Creation of Wealth

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Hi Everyone,

I have recently started researching mining exploration and development with a view to increasing my exposure to this sector of the stock market.

One thing that has become apparent to me is how many Directors can with minimal financial risk and exposure generate the potential for significant returns.

Is it not feasible for a person to do the following:

1. Seek private investment to purchase/establish a mining exploration lease/previously mined site.
2. Spend the private investment cash to hopefully generate some good drill results.
3. List on the ASX and seek capital to either develop that site further or purchase new exploration targets that may be further developed.

Now if you hit it big well you has the director/founder are rolling in shares and make a healthy return. If worst comes to worst and the company is liquidated you can just start the process again.

Anyway I just thought I would post this for discussion as it is thought provoking and highlights one of the downsides associated with explorers IMO. The directors have minimal risk yet the potential for huge return everyone else shoulders the financial burden.
 
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Very astute Paul...Perhaps that is exactly why a number of serial company directors do exactly that time after time. Of course you have to be very fortunate as an investor to actually make any money.

Unless.... your special company director friend is able to tell a really good story, let you buy shares ahead of the ASX release and give you the opportunity to immediately stag your shares for a tidy little profit. :rolleyes:

Or....you could be the investment advisor who gets to tell all and sundry why Dry Gulch Mining is going to be the next Fortesque and takes another tidy commission selling the shares.:rolleyes:
 

skc

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Hi Everyone,

I have recently started researching mining exploration and development with a view to increasing my exposure to this sector of the stock market.

One thing that has become apparent to me is how many Directors can with minimal financial risk and exposure generate the potential for significant returns.

Is it not feasible for a person to do the following:

1. Seek private investment to purchase/establish a mining exploration lease/previously mined site.
2. Spend the private investment cash to hopefully generate some good drill results.
3. List on the ASX and seek capital to either develop that site further or purchase new exploration targets that may be further developed.

Now if you hit it big well you has the director/founder are rolling in shares and make a healthy return. If worst comes to worst and the company is liquidated you can just start the process again.

Anyway I just thought I would post this for discussion as it is thought provoking and highlights one of the downsides associated with explorers IMO. The directors have minimal risk yet the potential for huge return everyone else shoulders the financial burden.
This happens in all sorts situations. An institutional trader can make huge bets going long sub-prime in 2007 (and they did) and make large bonuses (and they did) until it goes bust - they are keeping the bonus while the investors / bank / taxpayer pay for the loss.

And the said trader will move on to another bank, where someone things "He's learn an expensive lesson so I will hire him!".
 

Country Lad

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Paul, the character in this article took up numerous leases during the slump when they were forfeited.
http://www.townsvillebulletin.com.au/article/2008/01/10/9728_news.html

It is interesting that this article was done without checking some facts because I had warned the editor to take care back in 2003. I had dealings with him as Byrt and Burt starting in 2002, didn't believe his stories right from the start and made a point of not incurring any expenses in the delaings. I won't comment further becasuse I understand he has been litigious. This article a year after the first one is interesting.

http://www.townsvillebulletin.com.au/article/2009/04/18/49511_hpnews.html

If he could do it then anybody could. Mind you, I assume your past would be pristine compared to Burt/Byrt/Birt.


Cheers
Country Lad
 
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Excellent contribution Country Lad. Certainly sobering to read both stories and realise just how dodgy Mr Burt is. And shows just how careful we need to be with these floats.

I noticed that in the first post Mt Birt was quoted as worth $100m + and shares in his company RMA Metas were around $1.77.

RMT fell off a cliff in 2008... Current price is 3.1c.
 
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Paul, the character in this article took up numerous leases during the slump when they were forfeited.
http://www.townsvillebulletin.com.au/article/2008/01/10/9728_news.html

It is interesting that this article was done without checking some facts because I had warned the editor to take care back in 2003. I had dealings with him as Byrt and Burt starting in 2002, didn't believe his stories right from the start and made a point of not incurring any expenses in the delaings. I won't comment further becasuse I understand he has been litigious. This article a year after the first one is interesting.

http://www.townsvillebulletin.com.au/article/2009/04/18/49511_hpnews.html

If he could do it then anybody could. Mind you, I assume your past would be pristine compared to Burt/Byrt/Birt.


Cheers
Country Lad
Very Interesting Country Lad.

I have been doing a bit of reading and it seems like this whole thing can be put together for relatively small sums of money.

If you have access for a couple of hundred K, buy the rights over an exploration area and then float the thing. Even if you don't find anything you can drag the company on for a few years and pick up a directors fee.
 
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Not exclusive to mining operations either. Anyone remember Western Kingfish Ltd? (WKL) Boy did they rape and pillage the nupties. All based on a glossy brochure with pie charts and graphs. Amazing that people put money into it in the first place IMO. :2twocents
 

Country Lad

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If you have access for a couple of hundred K, buy the rights over an exploration area and then float the thing. Even if you don't find anything you can drag the company on for a few years and pick up a directors fee.
Ah yes, great shades of Pierpont.......and you should call it Blue Sky Mines NL.

For those of you new to this game,

http://www.pierpont.com.au/

Cheers
Country Lad
 
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