Bill Cara: Toronto vs Vancouver: Ready to Rumble!, Wed., Sept. 27, 2006, 5:20 PM

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September 27, 2006

Toronto vs Vancouver: Ready to Rumble!, Wed., Sept. 27, 2006, 5:20 PM

Bloomberg TV just carried the first round of the heavyweight fight between two leaders of the Gold industry. Watching it put a smile on my face.

"Bill, Both were "duking it out" !!!
Telfer says McEwen only one causing a problem; McEwen, as a closing comment, said he can stop the deal going forward.

Thank you for making me more aware of the gold market

mano
San Diego, CA"

The issue will apparently be fought first in the court of public opinion, and then in front of a judge. There will be a lot of blood on the floor before this fight has a winner and a loser.

McEwen has a lot of money. Telfer has a lot of handlers, who have a lot of money.

I just hope they get a better Canadian judge than the one whom I wrote about in another important matter. This judge is going to have to rule on the law versus the last one who basically took it into his own hands.

McEwen says Goldcorp broke the law; Goldcorp's CEO Telfer says they didn't, and McEwen knows it.

Telfer says he canvassed the top 100 shareholders and the only one who wants a meeting is McEwen; McEwen says he has a list of institutions who will force the shareholder vote.

This fight is shaping up better than the Canada-Russia '72 hockey series, and that one is enshrined in Canada as part of the national culture.

I assure readers there will be televised and print interviews going forward on this issue for weeks if not months. Just google or yahoo the news and you'll see what I mean.

Now let's see: Vancouver has mountains; Toronto has mountains of money;

Posted by Posted by Bill Cara on September 27, 2006 05:20:17 PM | Category: Cara Today in the Market

Discourse

Bill,

Will McEwen in your opinion have enough bandwidth to balance both USGL and the Goldcorp/Glamis stoppage?

Your insight is appreciated. I dont own any USGL but if this means USGL is going to come to me while this dog fights continues, I will wait.

Posted by: NYUgrad at September 27, 2006 5:51 PM [link]

NYUgrad,

That's a tough call. I think we need to hear from Rob McEwen on that one. For sure, his U.S. Gold shareholders are concerned.

Given you have already decided to buy shares of USGL/UXG, whether you decide to hold off buying or not depends on two major factors, I think.

First and foremost is the price of gold. If, as and when $GOLD breaks out above $610, I think you are likely to have already seen the low price for the stock. But the gold price could still test the $540 low, which would likely make these shares come off further. These shares are not backed by proven resources and production you know. To this point, the company is a prospector.

The other point comes down to the potential for positive drill results. The company is carrying out a very extensive drill program, and they are seeking quick results to build confidence in what they are all about. Without knowing the facts, I'd say they are drilling off their prime targets first. So I wouldn't want to be out to lunch and miss some excitement.

It's even possible that fund managers who are supportive of one or the other in the Goldcorp issue decide to carry that sentiment over to USGL/UXG.

It's a tough call.

Posted by: Bill Cara at September 27, 2006 6:09 PM [link]

Thank you for the rationale, that was the best explained "Maybe" in a while. :)

Another paralizing aspect of USGL is the move to a non amex/nyse/nasdaq. As you posted earlier on how the brokers will be able to easily borrow to short, once this moves off OTC.

On one hand it feels like a great oppty on McEwen's track record, disposition on doing right to the shareholder, and gives the common man to be a speculator/angel investor as in the early 90's in dot com.

But on the other hand they have zero ounces of gold. $200M lotto ticket. I am ofcourse giving both extremes. reality is usually somewhere in the middle.

It's definately a tough call.

Posted by: NYUgrad at September 27, 2006 6:48 PM [link]

typo... I meant USGL moving TO amex/nyse/nasdaq

Posted by: NYUgrad at September 27, 2006 6:49 PM [link]

Formerly in favor miner GG....overpays for GLG and drops in tandem with the premium offered to GLG shareholders but moves up today anyway.

ABX's hedgeing practices are questions by Bill recently but the market shrugs this off and ABX rises with the rest.

NEW tanks..... the only Miner or Major to do so, without any background noise to justify its decline.
Would someone in the loop like to offer a theory besides a corporate disclosure ( which is kind of unlikely).

Quail

Posted by: quail at September 27, 2006 10:37 PM [link]

Love this slugfest going on between USGL & GG in the market right now. This is the way to settle things between the parties ;) USGL=+$0.49 GG=+$0.52 @2:19PM

Long GG & USGL

Posted by: C.Note at September 28, 2006 2:21 PM [link]