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There has been much talk and discussion lately about the upcoming Revett Minerals meeting on 3/17/2010. As always with this company, there seems to be way more questions than answers. The stakes are high and the fate of their Rock Creek property could be decided. What will happen? What will the stock price do? What can a trader to do to prepare for the outcome? Worried or confused about what to do? Don’t be…Here’s why…. 

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As mentioned in the Revett Minerals Stock Trading Card, Revett is going ahead with their 20 day notice.

The Company is continuing to advance the Rock Creek project and a status conference has been set for March 17th, 2010 in the Federal District Court of Montana to discuss the status of legal proceedings and the Company’s intent to file its 20 day notice to proceed in early April. Concurrently the Company is working with State and Federal agencies on reclamation bonding and implementation of the wildlife and environmental protection measures as specified in the Record of Decision. -Source Yahoo News

I first discussed Revett on in the Revett Minerals Stock Trading Card when it was trading around US $0.35 cents. I reviewed why Revett is one of my hot penny stock picks and certainly an undervalued silver mining stock. Also, in their trading card I outlined 2 example trading strategies, which you can review if you have not already done so. We will discuss the two trading strategies below and add a small twist to them.

So, what will happen at the meeting? What new information will be disclosed?  What will the judge say? What will be the end result?

Honestly, who can say? Unless you can see the future, read the thoughts of the judge, or persuade him to do what you want, who really knows what will happen?

As you might have guessed by now, I don’t know for sure what will happen either. However, what I do know is this; from a trading perspective, we can position ourselves to manage whatever happens today or anytime hereafter. In order to do so effectively you need to understand a few things like:

• What is your investment objective for Revett?
• Are you interested in the short term or long term?
• What is the big picture?
• What are the fundamentals? Are they strong enough?

Personally, I tend to be more of a long term investor and use fundamental analysis to determine my edge before making an investment. If the fundamentals are compelling enough, I will usually make a purchase. I tend to stay with a stock for a while ( essentially, as long a my edge stays good ). Yes, I tend to hang in there through many of the stock price fluctuations as long as the fundamentals remain in place. This edge gives me the confidence to hang in there and buy more whenever the price dips.

I usually don’t follow the stock prices too closely because it’s not a good practice for long term investors. I like the long term approach because, I don’t have to get the timing right, watch stock prices all day, or read too many charts. I just need to pick strong fundamentals, look for an optimal entry point, and then wait. I do use some technical analysis to determine optimal entry points along with other methods.

Having said all that, I do want to mention that Revett Minerals is not one of my usual junior mining stocks because of the very issue we addressing in this post, the Rock Creek permit. My usual penny mining stocks will have had all permitting issues resolved before I decide to invest in them, unless they are in a mining friendly district. Even though Revett does not meet this requirement, I took a chance anyway because of how compelling their fundamentals are coupled with impressive silver fundamentals. The longterm outlook for Revett without Rock Creek is still very compelling.

Yes it is true, many speculators will be pissed off if Revett is not able to move forward with Rock Creek development. A great many of them will unload their shares faster than a rat running from a cat. Other short therm traders will sell too in order to protect their investment capital. The stock price will tank. Trading strategy #1 describes this scenario in detail and how to manage it.

In strategy #2, the assumption is that Revett will either receive the judge’s blessing of the judge and move forward with development or no resistance from judge when their 20 day notice is given. The reasons why this is the most likely outcome was discussed in trading strategy #2. No need to rehash it again here.

What else might happen today? What should a trader do?

There is another possible outcome from the March 17th meeting that we should consider; further delays. The judge and/or opposing environmental groups could press for additional delays in lieu of  having anything substantial enough to warrant an injunction. They could request more time to study the situation, ask for for more data, ask for more test, or whatever their clever minds can come up with.

If there are further delays, then you can also expect the stock price to drop somewhat too. So here’s where your investment objectives come into play. If you are in this investment for the long term, the delay does not matter as much because long term higher silver prices and/or the Troy mine life extension will still make Revett a profitable investment.

If you are more of a short term trader and the idea of Revett without Rock Creek is a deal breaker for you, then here is what you can do. If it were me and I was following trading strategy #1, then I would modify the strategy and set a stop loss to protect my investment capital. This way, if there are further delays or if it becomes apparent that development of Rock Creek is a “not gonna happen”, then you will get stopped out with a minimal loss. The long term trader could also do this and repurchase at a lower price.

What price should be set for the stop loss?

Well, it really depends on the trader and what he/she is comfortable with. I don’t know your comfort level or how much you can afford to lose. I am sure you do though. I would not set a tight stop loss as you could be stopped out prematurely.  It needs to be low enough to filter out any daily noise price fluctuations but high enough to allow you to sleep at night. If it were me, I would start with the price I paid and back it down 10-25% for my stop loss target. This is because I would not really want to get stopped out unless something went dramatically wrong. If you want to preserve any profits you have made, then make your stop a little tighter.

For the Revett investors out there, how do you plan to manage/prepare for the outcome of the March 17th Rock Creek meeting?

A few of my readers have asked me about Revett’s financing options for Rock creek via email and comments. In my upcoming newsletter, I will discuss their financing options for Rock Creek so don’t miss out, subscribe today.

Related Posts:

• 6 Reasons Why I Sold My Revett Shares
• Revett Rock Creek Update – 3/18/2010
• Revett Rock Creek Update – 3-29-2010
• Revett Minerals Trading Card
• 3 Things To Look For Before You Leap On Revett

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Disclosure: I have not received any compensation from Revett Minerals, Timmins Gold, Metanor, or Petaquilla Minerals. None of these companies are advertisers on GoldStockMania.com. I am extremely bullish on Petaquilla, Timmins Gold, & Metanor and currently hold shares.

Disclaimer: I am not a professional/qualified investment advisor. Readers should note I am not responsible for errors or omissions in this report. Also, I am not responsible for your trading decisions as you should do your own due diligence before making any investment decisions.