RE: RE: RE: Victor2009, Nash's Departure From LBEExSudburyGuy2,
I wouldn't say I was eagerly awaiting your reply. doingthejob commented that you were trying to tell me something that many had tried to tell me in the past. I merely said that you had not responded to the reasons I had given for not agreeing with your conclusions - nor those put forth by others that claimed Jilin Jien was not concerned with LBE making money. I was interested in your rationale. You most certainly had not made yourself clear earlier.
Your most recent explanation stated "Liberty has been paying much of their debt to JJ in nickel concentrate. So they do get the commodity directly from Liberty. And that's what they want. Which is why they don't care if they make money...."
The fact is that at the time Jilin Jien acquired control and until September 15, 2009, Liberty was under care and maintenance. From September 15, 2009 through September 30, 2009 (and I presume to this date) all nickel concentrate produced by Liberty has been shipped and sold to Xstrata - as reported in the MD&A disclosure for those periods. You are therefore incorrect in stating that Liberty has been paying much of their debt too JJ in Ni concentrate (since they acquired control) and you are wrong that they get the commodity from directly from Liberty.
As I knew your hypothesis to be based on incorrect information, I disagreed with your hypothesis, for that reason.
I also disagree, because as indicated in the information you pasted, the Mining Act requires that processing through to the refined product must be done in Canada. As Liberty produces only concentrate, it cannot sent the nickel directly to Jilin Jien after expiry of the permit next week. As well, Jilin Jien's control position does not give it the right to benefit, to the detriment of minority shareholders, by acquiring the commodity directly or indirectly at prices under fair market.
You now rationalize your contention that Jilin Jien doesn't care if Liberty makes money, by saying that Chinese operate differently than Western companies. Considering the antics of a large number of Western companies I can think of, you are paying a huge compliment. But I wouldn't carry it to the point that public companies based in China invest in subsidiaries or joint investments not caring if such investments make money. They may have some different values and methods, but they are not stupid. Comments of some referring to "Chinese" or the "People's Republic of China", indicate confusion on a basic point. Jilin Jien is not a state-owned company, it is a public company. Those familiar with foreign ownership will stress that this is the primary fact that must be understood in assessing the implications of foreign ownership. The fact that the controlling shareholder is based in China doesn't change the fact that Liberty is operates under Canadian law. Jilin Jien would be foolhardy to indiscriminately pour money into Liberty, and not have the objective of developing a profitable operation. Contrary to other bashers' claims that their intention is to rape the minority shareholders, there is protection that prevents them playing the games imagined by bashers like JohnEStromJr. For one thing if they are interested in sustaining a nickel supply, would they risk the political suicide of such an action in a country with one of the world's significant nickel resources? I have no doubt that they have an interest in promoting a supply of the commodity. Acquiring Liberty can be a small part of increasing overall supply, but it doesn't guarantee them a supply on any preferential basis that is detrimental to minority shareholders.
I am completely baffled by your conclusion that Jilin Jien has no concern about Liberty making money, and I continue to disagree with your conclusion. I am somewhat familiar with another company in the Canadian resource industry that is controlled by shareholders based in China. Your theories don't come remotely close to matching the objectives or realities of that company. By the way, minority shareholders have been able to do quite nicely being invested in that company since control was acquired by shareholders based in China.
Hope that answers any questions you have on my rationale.