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On July 21, 2011 I interviewed Michael McInnis, CEO and President, with respect to Riverstone’s then current operations and prospects.  A geologist and professional engineer, Mike McInnis has over 35 years of experience in mineral exploration in North America and overseas and 20 years experience in managing publicly traded companies.  He has held Board and executive positions with many public resource companies over the past 35 years, and currently is a member of the Board of Riverstone as well as 5 other publicly traded mining companies..

Riverstone (TSXV:RVS), headquartered in Vancouver, Canada,  engages in the acquisition and exploration of mineral resource properties in Burkina Faso, West Africa.  Riverstone primarily explores for gold. It has interests in 13 exploration permits in 6 regions covering an area of approximately 2,300 square kilometers in Burkina Faso.   The company’s Karma Gold Project contains a 1.93 million oz. indicated and inferred NI 43-101 gold resource.  Riverstone has 5 other gold exploration projects in Burkina Faso, 3 of which it has optioned out to third parties, where Riverstone has a continuing carried interest.  Riverstone currently has a 90,000 metre drill program in progress on the Karma project.

Login to StockResearch Portal to access Riverstone’s Company Overview page. When logged in, then access Riverstone’s:

• Segregated Drilling/Discovery Press Releases

• Segregated Share Update Press Releases

• Moving Average Price Charts.

In Part 1 of this interview Mike provided background information on Burkina Faso, and outlined his current perception of Burkina Faso country risk as he saw things on July 21, 2011. Parts 2 – 4 of this interview cover Riverstone and its operations.  This is Part 3.  You can listen to all four parts by visiting StockResearchPortal.com.

Listen to Parts 1, 2 & 3 of the Riverstone interview.

Disclosure: I currently own, and control ownership of, Riverstone common shares purchased in the open market. Riverstone currently is not a paid advertiser on StockResearchPortal.com.  Neither I, nor Stock Research DD Inc., have received compensation in connection with this interview.  See further Disclosures and Disclaimers.

Visit Stock Research Portal for free stock market data, analysis, and research on over 1,600 Mining,Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

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On July 15 the International Monetary Fund published a paper titled ‘Macroeconomic and Operational Challenges in Countries in Fragile Situations‘ – reading time 1 hour.  In the past few months I have read, as you may have, much criticism of the International Monetary Fund – this aside from the alleged sexual dalliances of its former President.  That said, I for one think that a great deal of what the IMF studies and writes about is important – and ought to be paid attention to.  This paper is an example, particularly for those who invest in the equities of companies operating in countries that are said by the IMF to fall into the category of being in a ‘fragile situation’.  The IMF paper says, which seems obvious, that “There is broad recognition that countries in fragile situations face unique challenges”.  The paper then goes on to discuss features that cause countries to fall into the ‘fragile category’ as perceived by the IMF, stating:

“While fragility may afflict countries at different levels of income and capacity, common features of fragile states are institutions that are seen to be weak and lack legitimacy, as well as a fractious political setting, which in turn elevates the risk of violence.  Fragilities impose large costs and hardships on local populations that can spill over to neighboring countries – directly through conflict, crime, and disease, but also through economic linkages.”

Other definitions of ‘Fragile States’ are included in the IMF paper, for example, the World Bank defines ‘Fragile States’ as:

• “a term used for countries facing particularly severe development challenges: weak institutional capacity, poor governance, and political instability.  Often these countries experience ongoing violence as the residue of past severe conflict“; and,

• includes phrases such as “weak or failing structures”, “social contract is broken due to the State’s incapacity or unwillingness to deal with its basic functions”, failure to meet “rule of law”, failure of “equitable access to power”, and “the government cannot or will not deliver core functions to the majority of its people”,  (European Commission and United Kingdom Department for International Developments), and so on.

You get the idea.

The ‘fragile’ countries mentioned in the IMF paper include the following combination of countries identified by the World Bank in 2011 (33 countries), and the Organization for Economic Co-operation and Development in 2010 (43 countries):

*    identified as a ‘fragile’ country by OECD, but not by World Bank
**  identified as a ‘fragile’ country by the European Commission but not be either OECD or the World Bank

The IMF paper links to references if you decide to read or scan it.  From my perspective the real point of this commentary is to identify for StockResearchPortal.com subscribers the countries according to that paper that the World Bank and OECD have flagged (in 2011 and 2010 respectively) as ‘fragile’ countries.  Many of the companies included in Stock Research Portal’s Company Universe operate in one or more of the listed countries, as do companies across all industry sectors.  As ought to be evident to you from reading my e-mails, I see ‘country risk’ – which I think has always been an important ‘risk assessment element’ in company equity valuation -in today’s volatile world economic climate, population growth, apparent climate change, etc. becoming an ever more important ‘risk assessment element’.  The foregoing is simply provided as additional input to your thinking and investment research.

Visit Stock Research Portal for free stock market data, analysis, and research on over 1,600 Mining,Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

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In my July 25 e-mail I commented on the fact that U.S. Hedge Funds pay income tax at capital gains rates on a portion of their income.  I said “it is my understanding that U.S. Hedge Funds, depending upon their investment success, are taxed federally on a portion of their income at long-term capital gains rates, which are lower than rates of tax levied on income.  Assuming that to be the case, that makes no sense to me.  If the business of a Hedge Fund is to make money as its principal objective – a thesis hard to argue with – it seems logical to me that all of its income both in theory and practice ought to be taxed as income earned, and no portion of its income ought to be taxed as a capital gain – including their carried percentage interest in long-term capital gains enjoyed by their clients“.

An article yesterday speaks to this very thing, and says that Congressman Eric Cantor (Virginia), a 48 year old who currently is the Republican majority leader in the House, has for years taken the lead in the House in fighting changes to that taxation.  The article, titled ‘In Cantor, hedge funds and private equity firms have voice at debt ceiling negotiations‘ – reading time 4 minutes – says that in the last year Cantor’s two fundraising committees raised nearly $2 million from securities, investment firms, and real estate companies.  The article says Speaker John Boehner’s fundraising efforts yielded less than half that amount from those same sources.  Cantor is said in the article to take the position that while he opposes tax changes to raise revenue as part of the Debt Ceiling negotiation, he is “open to doing so as part of broader tax reform that lowers overall rates” – whatever that means.  What it likely doesn’t mean is increasing taxes paid by the Hedge Funds.  The article reports that the hedge fund and equity tax proposals were center to Cantor’s decision to terminate talks with Vice President Biden earlier this month.

It seems to me that the Republicans expect President Obama to ‘negotiate against himself’ if a Debt Ceiling deal is to be done.  That is neither ‘fair’ nor ‘unfair’ as I see things, it is simply a negotiating position being taken by intrangicent Republicans who I think ‘might get what they wish for’ and as a result could find themselves in a bad place with Main Street voters at the end of it all.

It will be fascinating to see whether President Obama blinks.  I say ‘bad on him if he does’, but I also say ‘bad on all those Washington politicians who by their actions over the past few weeks have lost further credibility.  Irrespective of the Debt Ceiling negotiation ending in agreement – which I continue to believe it will – I have virtually no faith the Washington politicians collectively will be able to stop the U.S. economic ‘train wreck’ that I currently see weaving its way down a dilapidated track toward a bridge that won’t hold the train’s weight.  I think that the oft paraded ‘American ingenuity’ better work on that bridge at ‘warp speed’.

Visit Stock Research Portal for free stock market data, analysis, and research on over 1,600 Mining,Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

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An article yesterday titled ‘Postal Service targets 3,600 offices for closure – reading time 2 minutes – says just that.  It also reports that as late as last January the U.S. Postal service was contemplating closing up to 2,000 offices.  I suggest you don’t overlook the large increase in potential closings in just six months.  The article reports that the U.S. Postal service faces an $8 – $9 billion deficit in its current fiscal year, having cut $12 billion in labour costs over the past 4 years, and is ‘maxed out’ on its Federal Government line of credit.  The closure plan was announced yesterday.  Pointing out such things in my e-mails is becoming too repetitive for my liking, and the frequency of announced budget reductions through closures, resulting in further U.S. unemployment, is (as I see things) both predictable and worrisome.

NBC News carried the same story last evening.  It reported that there are about 26,000 Postal Offices in the U.S.  Accordingly, closing 3,600 of them is closing about 14% of them.

Visit Stock Research Portal for free stock market data, analysis, and research on over 1,600 Mining,Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

Possibly Related Posts:

• Greek Eurozone Exit Consequences?
• Q1 2012 Europe and Eurozone GDP!
• An Accident Waiting to Happen, or ‘Ever Closer To The Cliff’!
• After Spain, is Italy Next?
• Spain and Spanish Bank Dilemma!