Friday, March 18, 2011

Mo' Greystar (

As well as the more...errr....what's the word here?....err...strident views put forward about Greystar ( at this humble corner of cyberspace (check here for 'em all) over at The IKN Weekly we've also been following the case closely, but the news and views have been far more focussed on what the affair might throw up by way of investment opportunities. Here follows the last in the series that was part of IKN97, last Sunday. A few notes afterwards:

What you now need to know about Greystar Resources (
This is the last segment we’re running on GSL and it won’t take long:

1)      The decision on its Environmental permit approval is scheduled to come on (or perhaps before) Arpil 15th 2011.
2)      The company will be denied its permit. To update the quantative call on this, I’d call it a 98% to 2% chance of a bad day for the company.
3)      If it moves up from its current $2.78 and into the mid $3’s between now and early April on silly gringo speculation of a GSL win, it may be a decent short oppportunity.
4)      However it’s not a company destined to go to $0.00. It currrently holds around $1.10/share in working capital and there are plenty of its resource ounces that lie under the Páramo altitude limit that’s causing it all the permitting problems. I’ve seen estimates of up to 3m oz Au held by GSL that could be worked into a brand new mining plan that certainly couldn’t be presented to the world overnight but would give an asset backbone to the company.
5)      As it happens I am not short GSL but I do know a market player that was short GSL recently. Last Tuesday I wrote to him on a purely friendly basis and suggested that there was a bottom in the GSL downspike. As it happens he’d covered the day before and taken his profits. Smart guy you are, XXXXX.

IKN blog back. You'll note that certain things didn't happen exactly as stated in the text read by subscribers last weekend. For example the permit wasn't officially denied in April, instead withdrew its EIA/EIS application in March because it knew the game was up all by itself. Also, you'll note that the spec bounce over $3 didn't happen, so the shorting opportunity didn't show up either. The point here is that political risk issues are rarely fixed on rails and the story will emerge in its own way, but by getting the basic call right you either 1) save money for yourself and others (i.e. your author has no position whatsoever in, not long not short, and sincerely hopes that subscribers aren't long after all that they've read these last few months) or you 2) get a call out there that makes money for others (i.e. the redacted first name at the bottom of that IKN97 text). 

So this morning GSL is halted on the TSX and LSE pending news and anyone that knows how to use Google will know what the news coming contains, we're just left wondering how much spin the GSL management will put on the story...and whether they do the decent thing and resign their asses out of the cushy jobs they've spun themselves after doing absolutely nothing of value and spending umpteen millions of dollars of shareholder cash for the last 15 years. I'll probably stick an update on this post later when the GSL NR hits.  DYODD, dudettes and dudes.

UPDATE 10:44est: There's a rumour in the village that the upcoming GSL NR will flatly deny that the company is withdrawing the permit application and will call BS on the Colombian politicos' words of yesterday evening. We'll see how this one plays out and leave you with a quick quote of "Curiouser and curiouser, said Alice....."

Update 2: An hour and a half later and it turns out the rumours were about 3/4 1/2 correct. Here's the link to the GSL NR just out, I'll leave it to you to read and decide.