How to Recover from a Scorpio Sting
I'm not selling my small starter position, but nor am I adding more until Sometime after the revised resource comes out and I can make a detailed assessment. I already had my initial presumptions about the likely severity of the restatement blown out of the water, and I'm not prepared to raise my stakes withoud further clarity.
Excerpt: "A downward adjustment of previous expectations for the stock was certainly in order, and the market has responded accordingly with the swiftness of a scorpion's strike. While the market's adjustment does raise one speculative, opportunistic eyebrow, I believe investors lack the information they require at present to make a fully informed assessment of the shares. Although I will continue to hold my shares, I approach the stock with some caution even after the preceding sell-off."
Here is the portion of the conference call transcript that contains my question and Mr. Farsangi's reply. Although I don't think the transcript is entirely correct, it's interesting to see how his thought process seemed to evolve as he voiced his reply.
Christopher Barker - The Motley Fool - Analyst
My question on the concentrate settlement issues were just answered by the previous caller. So that was one of my questions. The other, I guess, would deal with the decision for a phase one of the plant expansion. Are you as comfortable today with that phase one decision, given what seems to be a growing sense of concern over the resource downgrade issue?
Parviz Farsangi - Scorpio Mining Corporation - President, CEO
That is a very good question. To be honest, I don't think we would have started phase one. Maybe that decision we feel comfortable. And as we reported, we saw some reduction. And unfortunately from what we saw underground we upgraded a significant reduction lately.
But at the same time look at the big picture, we have enough midterm/long-term resources. That plant as far as I'm concerned will be built. It is the timing on when we will have the (inaudible) going. It is CAD20 million. Not too many places they can expand the plant by 80% with CAD20 million.
So, anyway you look at it, it is always good to be prepared. James went through exploration upside. We still don't know the extent of what we have in the Nuestra Señora.We talked a little bit about La Verde. Again, there is some tonnes.There are things that we are working on that might fast-track phase two, but I think phase one is a wise move, and I don't think I would have changed it personally myself as CEO, even now. I would have got that going. But phase two might be delayed until we get some more information. [Empasis Added]
Christopher Barker - The Motley Fool - Analyst Great, okay, thank you very much.