RE: What did PNP tell you ? Part 2Craig Stanley Bets on Management, Good Assets
"TGR: Yes, but how do you determine which companies you take an equity interest in and which companies you don't?
CS: It's sort of the same factors that you hear bandied about, but it usually comes down to good management and good assets. And, ideally, it would have a good corporate structure, though that can always be fixed. By good management, I mean guys that have either experience finding deposits or a good, new concept. We like to invest in exploration stage companies, and good assets are those that have big exploration potential. I mean we're swinging for home runs. We're not worried about singles or doubles; we're looking for the big multimillion-ounce type deposits. " .........................
TGR: What do you mean by a "great corporate structure?"
CS: There aren't many shares outstanding; as I talked about earlier, we want folks that have good management and good assets, but I didn't mention good corporate structure. You don't want to have these companies that constantly issue hundreds of millions of shares. I know that's sort of a model in Australia, but here we want to focus on companies that have tighter share float. For example, if you have good drill results and you've got a tighter float, you get more leverage in the share price. I also find that, in a rising share price environment, if you have too many shares, it's like trying to herd cats to get the stock to move. Ideally, we want companies that have a nice, tight share structure. That also means management knows how to finance properly. It's a lot easier to create shareholder value with a tighter float. Now, that's not a hard and fast rule; companies sometimes come in with a great management team and great assets, but have a poor corporate structure. However, that can be fixed by, perhaps, rolling back the stock. It all depends."..............................
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