Tyhee versus Kimber: Which Is better? (Hypothetically Speaking)

It’s a well known secret that Jim Puplava is probably the biggest single share holder of both Tyhee Development Corp and Kimber Resources.

As a member of Kimber’s Board of Directors, Jim cannot publicly say much about his company. So, without specifically identifying Kimber or Tyhee by name, I phoned in this Q-Call and sent a copy to Dr. David R. Webb, Tyhee’s President and CEO with the hope that we could get a better idea of their thinking on what’s ahead in the next year for these two “hypothetical “ juniors that might bear a remarkable resemblance to Tyhee Development Corp and Kimber Resources:

“Hola Jim and John,

This is, you know who, from Buenos Aires, Argentina.

Jim!

Hypothetically speaking, there are two gold exploration and development juniors, both with about a two million ounce resource, both located in North America.

One junior’s avowed endgame is to be bought out within a year. The other’s is to go it alone into production in the next several years. But, it is expected to deliver a bankable economic study and a mine permit within the next twelve months (or so).

Hypothetically speaking, Jim, which of the two juniors would have the greater increase in its share price in the next year.

Que tenga buen dia, hasta luego.”

Dave Webb responded immediately to this question. He said, and I paraphrase, that he sees the options of whether to either sell or to develop playing out in these ways:

Selling is quicker, lower risk. A sale would net a lower return (quickly) than what would be available if one were to wait.

Whereas developing is slower and riskier, it may net out a higher return,

Potentially, a much higher return! Nevertheless, there is always a risk of failure.

However, when developing continues, the option to sell remains, even if development fails. In that event, there is a floor under the development.

This floor keeps rising as development progresses……………………………………………………………………………………….

Whereas Jim, on minute 1:06:33 of today’s FSN”s Q-line said,

“The one with the bankable feasibility study.

And, let me just give you an example of a mining cycle: I’ll just give an example of Minefinders. Minefinders made the decision to go into production early on in 2005. Up until that time while they were doing all their prefeasibility work, the stock was in a downward trend. That usually happens after discovery, and goes on to the growth phase. Because eventually people are going to want to know, what are you going to do. Are you just going to keep on building ounces? And, once you make the decision to go into production, people know you’re not going to grow reserves, you’re going to do block models. You’re going to look at geological models, mine content of your deposit, and the stock usually has a downward trend. Once they made the decision to go into production from, let’s say, from the low of somewhere around $3.50 on Minefinders, it went from $3.50 all the way to a peak of about 14 bucks. So, the company that’s going towards a bankable feasibility study is in a much better position for:

1) If it’s positive. They can get financing, go into production. That would be favorable for the stock, and,

2) If you got a bankable feasibility study, and it was, let me say, economic, then there’s also the idea that somebody might try to take you out.

So, the one with the bankable feasibility would be higher.”

Cheers,

Baires