TOP PICK
Great company. Market cap of about $110 million with about $20 million banked post this current financing. Discovered a new Carlin Style (?) system in eastern Nevada and have proven up measured indicator 800,000 ounces. His calculations indicate it is worth $2.90 a share. Currently trading at fair value but the upside exploration potential downtrend is enormous. Has not been drilled in depth so could potentially become a major district.
TOP PICK
$74 million in the bank and $74 million market cap. Very smart savvy management that is focused on earnings and growth. Good phosphate deposit but have put it on hold recognizing that now is not the time for production. Buying for the cash and management ability.
TOP PICK
Company follows a joint venture model. They recognize the inherent risks in exploration so they generate the ideas and bring in someone else to spend the dollars. Brought in Newmont Mining (NMC-T) to a gold/copper project in Haiti.
COMMENT
Gold: No time in history has there ever been the same circumstances that we now have, which could cause gold to shoot up substantially. Currently about $150 an ounce more than what he thinks its fair value. (His FV calculation is based on relative inflation rate of gold compared to the inflation rate of the US$.)
COMMENT
Market: This is a sucker rally. Far more downside ahead. In an over leveraged economy like this debt cannot be repaid and we need to see this shake out and we are years away from this. Bankruptcies and change of ownership is the bottom line. Not prepared to stick his neck out much further than gold and cash.
COMMENT
Economy: He is of the opinion that deflation is a non-event. There is zero risk of monetary or genuine deflation. Inflation is a very, very substantial risk and is almost convinced that we will see high rates of inflation in the years ahead.
COMMENT
Junior Mining Companies: If they don't have projects that are economic it will be tough to get cash. Opens up opportunities for investors to get into companies at cash or less in cash with companies that have real assets for further down the road 2 of the main things is to check for the amount of cash and debt they have. Also check management for their record and burn rate. Need cash to make sure they can get through the next 2 years.
PARTIAL SELL
Fantastic deposit in the order of ten million ounces at a decent grade. The issue he has is that the Egyptian government is entitled to 50% of the revenue once capital is paid back. He doesn't know how this comes into the picture further down the road. If you own, consider taking some off the table.
COMMENT
Oil: Looks at oil and commodities on an inflation-adjusted basis. Thinks that $70-$80 is fair value for a barrel of oil now, given the inflation we have seen. Bullish on oil after the next 6 or 12 months. Also a believer in Peak oil.
SELL
Potash has held its price up because of supply reductions from Potash (POT-T) and Russians. Sceptical that they can keep that game going. Expecting a revolt in the potash sector that will bring prices down. Should tread very lightly around any company that will need funding.
COMMENT
Has a lot of respect for the company. Sold his holdings because he was not seeing the deposit getting bigger. Good deposit but before getting back in he needs to see an extension to that deposit. Still a lot of work to do.
BUY
Great deposit. Have about 2.5 million ounces in pit. Another 2 to 3 million that falls outside of the pit. His model shows this at about $4 a share. Good takeover target for an outside company. Have about $24 million in the bank, which should get them through this year and into next year.
SELL
Great deposit that produced several million ounces and this company came back in and put it back into production. Low-grade, open pit deposit. Being acquired by New Gold (NGD-T). (See comments under NGD-T.)
COMMENT
Acquiring Western Gold Fields (WGI-T) deposit. Mining the oxide and have gotten through the best of it. Recovery then goes down a bit and they start looking at the sulphides. Will they be able to economically process the sulphides? Will do quite well in a rising gold market.
DON'T BUY
Pretty good deposit as long as gold prices hold up. At the stage now where they have to build it. Doesn't see a lot of upside in it until they prove that it actually works.