The price is only so low because of politcal risk. People think Evo Morales may nationalize businesses like this. However, what seems to be less acknowledged is the fact that their operations are in Eastern Bolivia in the Santa Cruz department which is far more right wing and recently won an autonomy vote, although their autonomy is not being recognized.

They will be a referendum in August that may push the current socialist leader out of power which would ensure the future autonomy of the Santa Cruz department which would nullify most of the political risk and ideally push the price up astronomically, in my opinion.

The stock barely trades at cash value. PE is below 3 last I checked. Basically all future cash flows are extremly heavily discounted, or not being valued at all. The recent quarterly showed net income of about 6 cents a share, and the price of the stock similarly moved from about the .66 area to .72.

Another interesting point, though I am less clear about this part, is that the current mining operation is nearing an end in the intermediate term. However, they are processing nearby drilling reports and feasibility reports, if there is another viable spot, they can use the same facility to process the minerals. However, if not, they may need to move to another concession which would require deploying capital for new facilities. In my view, if they lower their cash balances by investing in operations, we could see a downward movement in the stock. The way I see it, a government can cease the facilities, but not the cash, as it is kept in an American account. Deploying cash naturally, would lower their cash balance which is secure, and transfer it into equipment which is ceasble.

In terms of my earnings projections for next quarter, I expect them to be relatively in line with last quarter's results. The average price at which the gold was sold at was in the low 900 range, so we may see a slightly lower average price. The increase in the unit cost of production last quarter was largely due to an increase in mining royalties due to new legislation (income tax also increased significantly) which will not change for the upcoming quarter, however, increased energy costs will likely have an effect. The gold concentrations have begun to taper off it seems and it is possible that this trend may continue, but I assume it is relatively in line with last quarter's. My last consideration is rain, which had an adverse effect on total tons processed last quarter. In the southern hemisphere summer (the months of December, January and February), is when most rainfall occurs and generally the months of May through Sepember have minimal rainfall; presummably, the account of tons processed should increase over last quarter atleast somewhat significantly. So, as I said, I expect profits to be roughly the same quarter over quarter, but perhaps we are more likely to be a slight decrease mostly on account of the market price of gold.

Performance is a almost a given in this company, the two main considerations, in this order, are political risk, and then the possibility of nearby drilling tests coming back with encouraging results.

In my opinion, since we are trading near cash value, the downside is quite limited. However, if the referendum turns out favorably, and the drill result are also good, the upside would be rather astonishing, and very lucrative.