Today I happened on a retraction notice to an NR by Victory Resources (VR.v), both released yesterday (No position in VR. I hadn’t even heard of them before today). Before reading the retraction, I wanted to see if I could pick out the reason for the retraction in the NR… and there it was: “economically viable…”. Twice. I then did a quick look to find a reserve or even a resource estimate. I didn’t find one.So then I read the retraction, and sure enough “…economic viability… not supported by a current resource estimate or feasibility study.” (Now I will nitpick: they really only retracted one statement, but they said it twice). The statements were made by the president, approved by a director, and presumably vetted by IR before release.So the most basic of errors, spotted by a dumb, little investor (me), somehow passes by at least three people who should know this stuff. But it gets better. From their latest MD&A, May 2011, released in August.“In its press the Company referenced reserve estimates for the Reforma property made by Peñoles. It was also stated that past exploration conducted by Peñoles resulted in the delineation of the “El Chapote” mineral zone which contained a reported mineral reserve. The Company’s press again made reference to a mineral reserve at the Reforma Mine; this was repeated in the Company’s press . A mineral resource was also identified as existing in the Reforma South mineral zone, and historical reserves identified at El Chapote were also reclassified as mineral resources. The ; however, the Report will be updated as and when required by NI 43-101.”and“The for the Reforma property…”Three earlier releases were retracted not long ago. I didn’t bother to look any further to see who was in charge when those releases were made and this retraction was made. This company is a serial offender.Victory Resources: easy avoid.I think I’m starting to get the hang of where not to put my money. If you don't think your blog is already overpopulated with them, it may be a good "avoid" case study for other dumb, little investors. Here's an idea: a case study booklet in resource investing avoids for dumb, little investors. Just gather your Ottotrans blog entries into one place :-)
Saturday, September 10, 2011
Mailbag: Reading junior mining NRs
Here's a mail received the evening of Thursday Sept 8th from reader TK. It's featured here (with permission granted) to show that it really doesn't take much effort to development the critique mindset when it comes to junior mining NRs.