LETTERS TO THE EDITOR — Industry needs dose of credibility

The recent collapse of Crystallex International gave the mining markets a shock that fundamental investment analysis could have prevented, saving investors millions and the industry another embarrassment.

When the Las Cristinas decision went against Crystallex, investors lost some $150 million in market value. These losses will make already wary investors even more doubtful. Capital follows credibility, and right now the industry is starved for credibility. Restore the credibility and the capital will follow.

Setbacks such as Crystallex make it difficult for brokers and investors to believe the real opportunities that abound in exploration and mining. For the serious, long-term investor, exploration and mining companies offer many legitimate opportunities with both established and junior exploration companies.

Analysts who fail to do the grunt work required to separate needless risk from real opportunity hurt the industry in the long term. When [The Gold Mining Stock Report Editor] Bob Bishop blamed the Crystallex loss on crooked Venezuelan courts, he shirked his own responsibility to do the necessary geological, financial and legal research before recommending the stock.

It’s fine for newsletter writers to recommend high-risk, potentially high-benefit opportunities — as long as the analyst presents the investment accurately. You don’t sell a ride on the kiddie merry-go-round and then put the customer on the roller-coaster. Certainly, betting your money on a foreign court ruling that pits a giant company against a junior represents one scary, potentially thrilling, roller-coaster ride. That the ride ended on a nadir rather than a peak shouldn’t be blamed on the court rulings.

.SDaniel Mac Alpine

.SEditor, Boston Mining Investor

.SBoston, Mass.