At least this mini-meltdown for IPT has generated some discussion on the board, and perhaps a capitulation is at hand, both of which are positive for the future, IMO.

I think Casey has many feathers in his hat to warrant some measure of respect, and his picks are better than many other advisors. But I think he has it sadly wrong about IPT.

Keep in mind that my personal opinion is highly biased, since I have owned the stock for more than 3 years, I continue to buy on the dips, and I know management, and benefit from a paid advertisement on my website. I can also state however that I have a sound understanding of the junior mining sector and specialize in Mexico stocks, and I have personaly toured several dozens mines and exploration prospects in the last couple of years, including a visit to Zacualpan. I was posting about IPT long before Casey mentioned it, and I remain a staunch supporter.

If Casey is concerned about a lack of compliant resources, perhaps he has missed the business model as presented by IPT management, where there has never been a high priority placed on proving up a resource because the geometry of the mineralization does not allow for a large resource without extensive wasteful drilling work. The rule of thumb for narrow vein mining is to drill for structure and drift for resource development, and IPT has performed exceptionaly well under that model.

Casey also appears to lack patience. It is true that a small volume producer is not going to attract a premium market valuation. However, it is also true that the market DOES value growth and earnings. Year-over-year, IPT delivered impressive gains in production volumes, and has already set the framework to post incremental gains for at least the next 2 years. Also, development work has put in place the foundation to allow for additional resources to be exploited and new discoveries to be advanced. Unlike almost every other junior, IPT has been able to report a modest profit, even while all the other capital investment is underway.

Why does this matter? The company is defining itself as a capable operator in the high-grade narrow vein environment. The track record is being established that consistent gains in both production and earnings are possible. The steady investment into additional infrastructure and production capacity means that IPT can grow beyond a low volume operator. One need only review the history of WRM/G to see how a small mine operator can grow to the status of a major given enough time and operating success. And time requires patience.

It seems the market is willing to penalize IPT for doing exactly what the management said they wanted to accomplish. The critical point to consider, which Casey flatly fails to appreciate, is this:

The modest earnings posted by IPT are not the objective.

The objective is to grow the company into a large producer capable of delivering steady growth. Steady growth requires regular investment and development work. Capital investment requires cash to fund the work. And therefore the relatively modest production and cash generated today are the reason that IPT is worth owning and holding. It is allowing all of the growth and development work to be funded without diluting IPT into oblivion along the way.

I find it extremely odd that Casey would stick with MAI as a stock pick, when that company is a fine example of how investors get screwed by heavy dilution when spending gets too far out in front of cash flow. My intention is not to bash MAI, but just to contrast how inconsistent his approach seems to be.

The other relevant fact worth considering is that IPT is one of the few companies that has successfully put a new mine into production in a short time frame, and they have accomplished this at least twice, with more coming soon. Those who wish to Pooh-pooh the accomplishments and current production level would do well to contemplate how quickly the company has shown it can grow.

I bought more IPT this week. I will be buying more next week but I have chosen to be patient and strategic, since the market depth remains weak, and I suspect I will be able to add shares even cheaper if I sit on a bid. I am happy that the market has allowed me chances to sieze great stocks on deep discounts, and I have profited greatly from similar episodes in the past. When popular analysts issue sell reccos on good stocks, it usually marks the bottoms and creates exceptional gains for those that ignore the advice.

cheers!

mike