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Message: The Game Has Changed

The Game Has Changed

posted on Dec 16, 2009 03:28PM

All:

One has to spend money to make money. This does not mean that all money spent will make money. Capital must be allocated judiciously involving any business endeavor. My take on Gordon Cummings is that he is not only patient, but methodical. He has a plan, and he is working that plan, but also, he is willing to make adjustments to that plan as business conditions determine the necessity of such adjustments. The previous financing resulted in the the most recent drill results which had a very favorable impact on the company outlook and therefore the stock price, i.e. the public's interpretation of that outlook. He knows this.

As far as dilution goes...This is the price that must be paid to continue to demonstrate an increasing estimate of Kimber's resources. Will it not be beneficial if Kimber's shares outstanding double or even triple if the company can increase its resources by ten times, or even five times?

I have long suspected that the Carmen Deposit is much larger and goes much deeper than the market suspects. Perhaps Gordon Cummings suspects this as well. If he does, then his plan of attack, so to speak, makes perfect sense: delineate as large a resource as possible (one that potential buyers can recognize, interpret and understand), and continue to set the company up as an attractive takeover candidate.

I know Gordon is a conscientious, smart and patient businessman who understands the importance of doing things "by the book." I also understand him to be an eminently practical man, one who understands the mission before him and also that the regulators in charge of 43-101 compliance standards are most likely not the ones who will be lining up to buy Kimber at some later date. As in all endeavors, balance is called for, and I believe he understands this concept very well.

There are certain standards that must be followed from a legal standpoint, but there is also a point where big buyers, with a much greater knowledge of geology and mining than the general public or most government regulatory agencies, have essentially, "seen enough" and will buy based on what their eyes, experience and personal interpretations of the data tell them. A resource need not be delineated to the quarter inch, in other words. It just needs to be delineated to an extent that those with the money understand it to be what it is.

Also, please do not underestimate the importance of what is happening with the price action of the stock right now. Every financing over the past few years has resulted in a collapse in the stock price. The reasons for this are most likely those outlined multiple times on Jim Puplava's Financial Sense News Hour over the past few years on various shows, i.e. institutional naked short selling with a plan to acquire discounted stock shares by participating in stock offerings at a later date. Such practices, are, of course, designed to enrich the investment bankers involved in such endeavors at the expense of common shareholders of the related companies (usually junior miners). Such small companies, in need of capital, in limited capital markets, usually have little choice but to comply with the wishes of these bankers who become their unscrupulous masters.

When Gordon Cummings, in his recent interview with Jim Puplava called these most recent drill results a “gamechanger", he most likely meant in more ways than one. If, in the future, Kimber can go to the markets and get cash without the help of the above described organizations, then things should be very different for the company from now on, and for obvious reasons. The fact that Kimber's stock price has stayed strong before and around the time of the new financing announcement is ample evidence that a different situation involving capital markets and Kimber’s relation to them is upon us.

In other words, Mene, Mene, Tekel u-Pharsin, unscrupulous investment bankers beware! The game has changed. I see good days ahead for Kimber and all of us. Bull


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