Replies to post #1664 on Mining Company research board

[1manband]

The C.O.D. gets passed around from pump and pump to pump and dump because it is a "promotable" property. There is enough history and BS there to fool those who really know little to nothing about mineral exploration, which is definitely the target buyers for these POS stocks.

Old worthless mines are especially popular for these schemes for several reasons. First, they are dirt cheap because they are, essentially, worthless. There is absolutely no value or demand for them from legitimate mineral exploration companies, so really the only avenue of profit for the owners is to lease or option to scammers to use in a pump and dump. There are a lot of websites with "mining properties" for sale that do nothing but market these worthless mines for that sole purpose. They say in the ads they have "reserves" (a complete lie) and are willing to accept stock in exchange for the property.

Second, the past production makes for a great story. The newbies and ignorant buyers eat that up, even though common sense should tell them the easy and cheap minerals are long gone. Sure, gold prices are high, but on an inflation adjusted basis, we are still well off the all-time highs. Plus, mining costs have soared - the costs have risen approximately as much, if not more, than the price of gold. Environmental rules are much, much tighter now, too. If these old mines had anything worthwhile, they would have likely been brought back into production years ago when gold prices were higher, costs were lower and environmental rules were much lighter than today. They would not have sat abandoned for decades.

Third, the proximity to a producing mine is a bonus. People don't realize the fickle and scattershot nature of geology. Just because it is near another mine doesn't in any way mean it has the same geology.

Going back and looking at the history of these properties is always interesting, and good DD. If they get passed around from pump to pump, and no actual exploration is ever conducted by any of the holders, it is a pretty good sign the property is worthless.