Yamana wished to increase there exposure to gold.

They approach Meridian, a marginal producing company that has always underperformed and mostly lost money.

They are a high cost producer whose last 4 quarters before the take over showed a net profit of 5.7, 6.5, 18.9 & 24.5 for a total of 55.6 million dollars. There best ever showing.

This showing was mostly do to the fact that gold had risen significantly.

The last quarter is interesting to me, especially since it just happened to be a record quarter and put out just before Yamana announced a take over bid.

I looked for a reason for this and immediately found what I suspected. In the first quarter of 2007 they had an increase in production of 1%. In the secound quarter that miraculously jumped to a 13% increase. This is all basically from one underground mine.

Let me just say that it is almost impossible to increase production from an underground mine at this stage in a single quarter by 13% unless you do certain things that then will decrease your production in the following quarters..

Now Meridian after the first quarter of 2007 knows Yamana is interested in aquiring them.

Therefore there management in my opinion desided to make there numbers appear better in order to increase the take over offer.

This can be accomplished by taking miners away from developement work and concentrating them in production zones, by high grading ( producing only from your highest grade area's) and by running through the mill any ore stock piles you may have for blending purposes.

Now all these actions will increase your numbers dramitically for the quarter, but will catch up to you in the next quart if your developement falls behind, you are left with only lower grade material and your mill loses recovery because you have no stockpile left to properly blend higher and lower gradesl.

This of course does not mater to you if you know by the following quarter you are not going to exhist as a company hahahahahaha.

You then use that quarter to say Yamana first bid is too low based on the foreward projection of the last quarter earnings of 100 million per year hahahahahahahaha.

Then you reject the 2nd offer and finally accept the 3rd offer just before 3rd quarter numbers come out hahahahaha.

This is how a smart management gets paid 3.5 billion dollars for 7.5 million marginal ounces and increases shareholder value.

Meridians grades and widths on multiple sites are not even in the same Universe as FDN. Therefore if our management was as competent as Meridians management then I see absolutely no reason not to get the same insitu valuation.

These are the real FACTS as I mentioned in a prior post. They are only know to those very knowledgable in the mining industry and to prove it:

Yamana Gold profit drops, could sell assets

Regards,

F.F.