SAM - they might not have been actively presenting themselves, but when I called 3 days before the release of the financials, I got an entirely different outlook than reality. At that late stage, they knew every detail about Q4 production and already had their BOD meeting to approve results. In all my days investing in juniors, I've never been told more bull and been given more absurdly rosy outlook. IR was saying 32,000 oz MINIMUM in '08 with good chance for 40,000 (said "look at our Investor Presentation" - which guides to 40,000 oz). In reality, they don't have a hope in hell of getting 32,000, let alone 40K. They will have a very difficult time matching last year's 28,000 and I suspect 25,000 is more realistic (4K in Q1, 5K in Q2, 8K in Q3, 8K in Q4 = 25K total).
And they won't be back to normal in Q2 as they specifically said they'd be ramping production back up during Q2. That means they won't be at "normal" rates until Q3. The best they can probably do is match last year's production (28K), and that assumes some sort of expansion in Q3 and Q4 - that's a far cry from the 40,000 oz that they were leading the market to believe was coming.
And since substantial parts of their current production are profitless ounces (ie "purchased ore"), their cash situation will likely deteriorate as they spend capex to develop the new mine faces to bring on new production.
Let us know what they say in NY. I'd love to grill them about production vs forecasts. Ask them specifically about how much "purchased ore" is being bought and how many ounces that is providing and how many ounces they expect in the future from buying ore. Those are profitless ounces, so they shouldn't even be mentioning them unless they add a big fat asterisk next to them with a disclaimer.
So many red flags are popping up when I look as SAM. Deceitful management. Profitless production. Overly generous option plans. Declining grades and production 3-4 quarters in a row. But for strongly rising Au and Ag prices, they'd be in deep chit.
The more I think about the bs I was told, the more pissed I get.
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