The issue is that the gold component at Copper Rand is this huge wildcard.  It’s could contribute tens of million of dollars to Campbell’s earnings.  But whenever Management gets a chance, they will deny that these targets could ever be reached. 

[Cynical paraphrase]

“Oh, my foot hurts”,

“We are having problems”. 

“We just paid $3 - $5 million for the Alimak system, and our internal production targets went down as a result.

New sources.  Check this out:

Here is an AUDIO interview with Mr. Fortier from 2004, where he mentions the 50,000 ounces gold per year target (just from Copper Rand):

http://www.macreport.net/ceo_int/ceoint_asp.asp?IdNumber=100190

A Canadian Press (CP) article posted on the “goldismoney: website in 2004

http://goldismoney.info/forums/archive/index.php/t-4620.html

This press release says “annual production of 40,000 ounces by 2005.

This article also mentions the percentage ownership.  Campbell was able to attract a $60 million investment while having only a 76% stake in the project (it started at 26%).   Right now, Copper Rand is 100% owned by Campbell.

The article says “$32 million invested”, but more recent press releases have the total at $60 million.   There is an SEC report below that documents this.

Staring in 2006, Campbell started writing down the Copper Rand property.  I believe that this was just an accounting game:

- Take losses now,

- Helps downplay the stock, while Institutions accumulate

- And the tax loss carry-forward on the books increases.

In the 2006 annual report, the “tax-loss” carry forward was listed as $71 million.  But now there have been two more quarters with losses, so the carry-forward is now more like $78 - $80 million. 

That’s more than the market cap, for Christ’s sake! Today’s buyers are buoying into a forward looking tax situation that is more than today’s market cap!!!

Then the write-downs started, so you never see the $60 million number (investment in Copper Rand) mentioned anymore.  But here’s an SEC report that documents my number:

----------------------------

http://www.secinfo.com/dRX7g.vj6.d.htm

COPPER RAND MINE                                                               

The development period of the Copper Rand mine is expected to be approximately 

four months from completion of the financings and would allow the mine to double

production to 350,000 tons per year at a cost of approximately $5 million. Over

the last five years, more than $60 million has been spent on developing the    

More deliberate downplay?   I think one of Campbell’s recent press releases quoted a much lower number (for total investment in Copper Rand) than this $60 million number.

Management doesn’t like that $60 million numbers circulating, because [I believe] given the high level of mining expertise of the Investors (like Sprott Asset Management), it helps prove that Copper Rand is going to be an absolute freaking cash cow, when they let it perform like it should (when the downplay games stop).  

Institutions would not have invested that kind of money (at much lower metal prices) if they couldn’t see a return on their investment.   And they were investing at a time when Campbell didn’t even have 100% ownership of the project.

Maybe it’s these “hidden” drill results (next post) that explains everything.

==============================================

Here’s an SEC filing, showing that Sprott Asset Management invested $4.4 million in 2003:

http://sec.edgar-online.com/2003/08/29/0000909567-03-001054/Section4.asp

My key point with this is that:

- THERE is no way that Campbell’s early gold production targets could have been incorrect,

- AND Sprott Asset Management (SAM) invested money based on those projections

- AND now Management is saying that [paraphrase] “none of those targets are achievable

- AND Sprott Asset Management has invested more in Campbell right under our noses.

Here is a PR Newswire report from 2004:

This press release shows how the ore grades at Copper Rand showed a huge improvement in 2004.

http://goliath.ecnext.com/coms2/gi_0199-4213045/Encouraging-Results-from-Diamond-Drilling.html

--------------------------------

Excerpt:

“Current preliminary results therefore indicate a 67% increase in available tonnage for this area of the mine as well as higher metal content for both copper and gold (67% and 57% respectively) compared to initial results.

According to Andre Fortier, president of Campbell Resources Inc.: "We were always confident that the...

-------------------------------

This meant that in the very earlier years, when Sprott Asset Management AND OTHERS were investing, the ore grades were even lower. 

So why the hell would they be investing, if they didn’t see a profit potential at those lower grades?

The answer is that they did see a profit.  It means that true on-going costs that Campbell will experience at Copper Rand have always been lower than what Management has tried to tell us in the last year.