I applaud IPT for going out and grabbing a small new mill, and for doing so at an attractive price. I have been to visit several dozen projects in Mexico during the last 2 years, and one frequent issue that has arisen for the emerging producers is the difficulty to source new equipment necessary to upgrade capacity.  There is used equipment to be found, but the price is high and reliability is often an issue.  Refurbishment costs can sometimes run more than the cost to buy a new unit, and spare parts are sometimes slow to arrive.  So IMO its a big deal that IPT has gone out and bought this additional mill even though they have not yet surpassed the current capacity of the existing mill at Zacualpan.  And dont forget they already have the option to purchase the small mill in Zacatecas.

To me the purchase is about confidence.  IPT is clearly confident that they will continue to grow production at Zacualpan and want to be planning at least one jump ahead to line up equipment and have it running properly when they are ready to ramp up to increased throughput.  The same management is running EGD, and again there is the theme in place of rapidly expanding equipment to build growth in future quarters.  Anyone that doubts IPT is serious about building more mines and increasing production should rethink their position in light of this mill purchase.

Unfortunately the market has not been impressed with anything lately, and IPT shares have sold off.  I understand the impression of high risk with junior mining stocks, and I know that many investors are backing away from risk right now.  But IPT has a solid cash position, has reported operating profits for several quarters, and is increasing production at a time when the metals are also rising in price.  I do not see the high risks here to warrant selling right now, no matter how the overall market behaves.  I do not think you can fight market sentiment, but I do look for that sentiment to bottom and then perhaps we may see some bargain hunting come back to the sector.

cheers!

mike

Voluntary disclosure:  IPT is a paid advertiser on my website