More Warrants Exercised by Finisky

Finisky exercised another 3,333,333 warrants on July 31, bringing his total to 10 million exercised which has added $3 million to the coffers.

In my opinion he is exercising options to provide needed expansion capital - not to increase his holdings for any kind of takeover scenario by the Russians.  There are no Russians on the Board or in any management position.  Finisky had the right to name two people to the BoD and he didn't name any Russians, but two highly respected executives whose integrity is beyond reproach IMO.

Besides Finisky is still a minority shareholder and would remain so even if he exercised all of his options.  He can influence the Board, but not control it.

I expect the vacant board position to be filled by the new CEO and it would be a good time to also appoint an independent Chairman of the board like we were promised last December.  I find it somewhat strange that the Board would take the position that PK was the best person to be Chairman in addition to President and CEO and then have her abruptly resign.  Perhaps Hulley will become the new Chairman after the new CEO is appointed.

I'm also wondering if McNutt threatened to leave as well, but was pacified by the VP of Operations and COO appointment.  He has been very loyal to Peggy and she to him as evidenced by the $800k payment she was able to get him to stay after the Finskiy investment.

The selling today appeared to be all retail from TD Securities - Canada's largest discount brokerage.  Pictet, with 56,000 shares purchased, was the largest buyer which was likely to be institutional.  I don't think we'll see much institutional buying until we can show that Lamaque is cash flow positive.

To me the only things that really matter are production rates increasing to 1,200 tpd this year and 2,000 tpd next year as well as a strong gold price.  I don't expect we will make the 2010 production target of 40k ounces from Lamaque, as we would have to average 1,350 tpd for the July - December period at current grades.  But we should get to 1200 tpd by year end which will put us in position to produce over 100k ounces in 2011 from both mines.