My understanding is that the total production volume of raw ore is increasing, but the net silver produced was lower because the average overall grade was lower. Management is very much aware of the operating costs to run narrow vein mines. They refuse to run lower grade material through the mill unless it can generate a profit. As the metals prices have risen, the cutoff grade to achieve that operating profit has declined, and therefore more of the mineral inventory becomes available to process. However the lower silver content of this material has generated reduced net silver production even with the higher tonnage processed. I think the magic number is to get to that 500tpd capacity and then even with lower average grades the net production will still increase.

I think if we see a sharp decline in silver then companies like IPT will decline in value. Money flow is finding stocks like IPT because the silver rush is attracting new investors. If we do see a sustained correction then some of that money will move on too. Also, I think the market is pricing in some additional exploration success from the current drill program. If the company comes up empty there will likely be some selling pressure.

My expectation is that the more likely outcome is for more resources to be defined and I am hopeful that somewhere along the way they will hit a big, high grade deposit that will make IPT a very hot story. Higher metals prices will just be the icing on the cake at that point.

cheers!

mike