Reread David Chapman's article dated 30 May 08

The credit crunch that got underway last June 2007, has meant that the junior miners, considered the riskiest of the risky, have been shunned. When gold and silver prices started rising, the money flowed only to the large-cap liquid names.

A number of hedge funds have been forced out of business as a result of the credit crunch, resulting in distressed sales of junior gold-mining stocs. As the stocks fell, more selling was attracted from weak players.

The collapse of SouthWestern Resources Cor in July 2007 on "deficiencies" and "errors in reported assay results" brought back memories of Bre-Ex, spooking many players in the sector.

More recently, mutual-fund selling, due to redemptions, has brought in more sellers in a generally illiquid market. On seeing the increase in sellers, market makers fade or sharply lower their bids.

The sector raised record funds for exploration in 2007. In a weak market, when the typical four-month hold expired, investors rushed to lock in profits or to sell into a depressed market.

The result of all of this activity is that only the committed remain in the market and the juniors are down and depressed. Many are now trading at values well below their asset value, which we define as their confirmed NI43-101 compliant, or legally reportable, resources in the ground. What is needed is something to spark the market. A significant find. Given the record amount of financings in 2007, there is a lot of drilling going on. While this is not guaranteed to eliminate the stink of SouthWestern Resources it would help considerably.

The medium-sized miners and many juniors are ideal targets for larger companies looking to increase their reserves. With the cost of mining not going down, many of the junior miners nearing or in early production could be prime targets for takeovers. As well, numerous junior-exploration plays are trading at levels far below the value of their reserves.

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Just shows Lbe has lots of company out there with depressed share prices.