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AceofKY

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About AceofKY

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    Tri-Centurion
  • Birthday 03/01/1979

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    Lexington, KY, USA
  • Interests
    Investing in precious and base metals, philosophy, theology
  1. Thoughts on PDAC 2013 · Crowd was very good – just as many as last year. I believe that the conference organizers did a better job of handling the crowd because it seemed like lines (such as coat check, food lines, etc.) were much shorter this year. · I had expected to see some empty booths due to junior explorecos not being able to make the trip. However, I was wrong. All the booths were full. There is a good chance the PDAC is the last gasp for many of them as it was noted that over 30 companies exhibiting had less than $200k working capital left. · Exploration activity seems to be slowing with the downturn in finance for the sector. There seemed to be many more junior Geos looking for a job than I remember from previous years. · I met multiple people who were “First Nations Representatives” (consultants/mediators, etc) of one sort or another. This seems to be turning into a big industry. Not sure what to make of that. · Toronto is still cold as hell in early March and I don’t understand why PDAC doesn’t move this convention to Cancun or somewhere warm. I did learn why the conference is held at this time of year. In the old days the explorers up North could work in winter (water was frozen) or summer (via boat) but not when the ice was breaking up in early March. Hence – they had nothing better to do then go to the conference. · The big “World’s biggest mining party” on Tuesday night (sponsored by Renvest this year) was even more crowded than last year. The Dave Murphy band is awesome, but they’re going to have to do something to reduce the crowd next year (or move it out of the Royal York). Keeping the students out would be a good start, I think. · I attended several of the newsletter writer presentations. I had kept some notes but unfortunately lost them when someone picked up my binder (probably by mistake) during the party on Tuesday night. Here are the ones I remember: o Ian McAvity – believes we’re only weeks or maybe days from a bottom o Taylor Thoen – this was a new speaker this year. Apparently she is a tv personality (not a gold/investing expert) in Canada and does a lot of CEO interviews. I enjoyed her presentation and remember that her website is: www.ceoclips.com. Also she was better looking than all the other newsletter writers combined. o Chris Berry and at least one other speaker were bullish on uranium o Keith Schaefer was bullish on oil refineries along the Mississippi River corridor. o Rick Rule – was in typical form (no powerpoint needed). His thesis was that the good stuff is cheap enough even though the sector as a whole will still trend down for a while. He likes PGMs (i.e. Sprott’s new physical fund) and gave a plug to Friedland’s new promo Ivanplats (Friedland apparently gave a presentation at PDAC but I missed it unfortunately). · Here are notes from either presentations or conversations with companies: o Hecla announced its bid for Aurizon on Monday morning and Phil Baker gave his presentation that morning. Supposedly the offer is accretive on all the metrics except for EPS which won’t turn accretive till 2014. There was (supposedly) no quid-pro-quo with respect to keeping Aurizon management or Board members in the merged company. I didn’t see his presentation but apparently Alamos CEO McClusky slammed Hecla pretty hard afterward. o Midas Gold – this project looks interesting but I’m worried it will take a long time to get permitted o Silvercrest – this story keeps getting better and better. The expansion of Santa Elena is underway and an updated resource estimate & production schedule will be forthcoming. I was originally skeptical about the low grade La Joya project but I’m now confident that they have a plan to develop it successfully. Metallurgy still needs to be confirmed, I think. Production should double for Silvercrest with the Santa Elena expansion and then double again when La Joya is brought online. I already have a large position (due to ~500% capital gains over the past years) or I’d be buying more of this one. o Sandstorm Gold – Nolan Watson promised he would never do another deal similar to the Entrée/Mongolian deal due to significant shareholder complaints. o Continental Gold – I first became aware of this Columbian project at last year’s PDAC but didn’t buy in as I thought the market cap was too high. The price has come off some since then but I think it’s still in that “boring” part of the construction/development phase where the stock price continues to drift down. The project itself is very high grade and they are spending a lot of money developing it right now. This is one to keep an eye on for next year. o Rob McEwen/MUX – still promoting his S&P 500 by 2015 goal. I don’t think he’s going to achieve that in the timeframe left with no better assets then what he has. Still trying to sell the big copper project. Will need more financing for the gold projects this year. Not interested in a stream deal and was critical of mining companies who resort to this type of financing. o Rambler – their production dropped somewhat early in the year due to some equipment problems. The solution is not yet in place but shouldn’t be very expensive. The loan with Sprott will be renewed/refinanced as they can’t pay it off yet. The hot IR chick from last year is no longer with them (big disappointment for me.) That’s about all I’ve got time to write up.
  2. Congratulations Dominic....with the coverage on ZeroHedge today I think it can be considered to have gone viral now!
  3. I agree Bubb. The juniors haven't fallen much more than the mid-tier and senior producers. We're looking at an easy double on producing gold miners when valuations return to normal, and many are paying comfortable dividends now. No reason to take on the extra risk of holding a cash-flow negative junior. Here are the profitable names I'm holding: GORO (2.8% yield) NEM (2.9% yield) NSU (3.0% yield) (and buying back stock like crazy) ASR.to (0% yield) SLW (1.4% yield) SVM (1.7% yield) HL (2.0% yield) SVL.v (0% yield) See my tabulations on 1st quarter earnings for gold producers: Miner 1Q Earnings Tabulation This is about a month old but prices haven't changed much since.
  4. I picked up a few junior miner ideas at the PDAC which I will try to write up in the next week or so.
  5. Kinross gives up 70% of Fruta Del Norte upside: http://www.kitco.com/pr/1267/article_12052011163649.pdf These do not look like good terms to me.
  6. Bubb, That's what I thought too when the acquisition was announced. But Tasiast keeps growing exponentially. M&I resources are already past 16.5MM ounces. When I was a Rio Narcea shareholder back in ~2006 this was a sub 1MM oz deposit. I'm still mad at the RNO directors for selling what has turned out to be a world class asset so cheaply. So now I'm starting to wonder if Kinross knew what they were doing with this acquisition after all. I'm going to be reassessing Kinross in the near future.
  7. The majors (at least some of them) are at a valuation level that we haven't seen since at least 04 when I got into the sector (except maybe for a brief moment in late 08). Sure their performance has been bad over the past decade. That's largely because a higher gold price was already baked into the valuations. Now we have the curious case where the gold & silver price have done exactly what we expected but the equity prices are sinking. Something will give eventually - either gold/silver prices will fall or equity prices will rise. I'm betting on the latter. Bubb, I'm going straight to the source so I don't get all the baggage that comes with ASA. Hecla and Newmont are two that I think are outstanding buys right now. I wouldn't want to own several of the majors in their portfolio - not worth the 10% NAV discount I think.
  8. Newmont is looking appealing here. Trading at ~US$26B market cap, ~6.5x cash flow, ~12.5x PE, ~2% dividend. My very rough estimate of NAV: ~US$45B at 1500 gold, 3.50 copper, 5% discount. I haven't bought a senior gold producer for a very long time. I think the last one was Goldcorp in 04, although I don't think it was considered a senior at the time.
  9. The U.S. investigative news show "60 Minutes" had a segment Sunday on high frequency trading: http://www.cbs.com/primetime/60_minutes/video/?pid=hQ6KF5TPh3jqZAVh9lwCmDg6WsDcmjqp&vs=Default&play=true Not much of an investigation in my opinion. The major idea suggested: via colocation the major exchanges are giving the quants first access to the data which puts non-colocated investors at a disadvantage. The exchange's rebuttal: colocation is for sale to anyone who wants to pay our fees. Ultimately the exchanges may be undermining their future if a viable alternative arises. I wonder, however, if all the volatility is not actually an advantage for small retail investors. I have been seeing good opportunities in the last months (both to buy and sell) based on fundamental metrics whereas in the past those same metrics usually indicated that basically all large/mid-cap precious metal equities were overvalued.
  10. I can't disagree with the mind-body dichotomy in general, but in this case I'm not quite following you. We must consume, at minimum, food and water to survive. And unless you have someone to spoon feed you while you lay on the sofa all day, then you're going to be producing something as well (again at minimum food, offspring, etc.) The organization of people in society allows us to have a division of labor and, instead of concentrating on the basic subsistence level of life, we are able to produce & consume on a higher level such as art, music, sporting, literature, etc. Without society, it is very difficult to have any free time that is not spent concentrating on the basic necessities to sustain life. There is a genre of American lit that fantasized about such life (I'm thinking specifically of Thoreau et al here). And then, even going farther back, the various monastic movements in Christianity over the centuries. The idea that you can have a life that is not engaged in production/consumption is rather naive, I think. The question is, what are you producing & consuming and to what end? The monks that I'm most familiar with (Benedictines at Saint Meinrad Archabbey in Indiana) are quite engaged in society even though they themselves are poor and their community lives out "society" in a much different way then the rest of us. There is the occasional hermit, I think, but it seems that the Benedictine community typically discourages life in complete solitude. I do not know all the reasons why, but I can imagine a few. I think also of Thomas Merton, who in his Seven Storey Mountain autobiography lamented that he was unable to do what he wanted (contemplate God in isolation, as I recall) due to the demands of his own Trappist community. His "production", although quite distressing to himself, has inspired millions of people in their spiritual lives and, I suspect, contributed ultimately to his eternal beatitude. Thus the dichotomy is not so much between mind and body as it is between "myself" and "others." When I make the choice that I will give up what "I want" in order that others may be assisted - there is nothing more self-determinative than that and ultimately, I think, happiness is likely to ensue although pleasure at the moment is certainly sacrificed.
  11. ASA holdings from the latest SEC filing: Agnico-Eagle Barrick Gold Compania de Minas Buenaventura Eldorado Gold ETFS Palladium ETFS Platinum Goldcorp Inc. Golden Star IAMGOLD Corp Kinross Gold Newmont Mining NovaGold Randgold Royal Gold Inc.
  12. Self-determination/freedom does not have to be the chief good in life and should not be in my opinion. Happiness, it seems to me, is a more worthy goal. There is a thread on that somewhere here. And some have suggested one must make a free choice to give up one's own self-determination/freedom (and financial independence too) for the good of others, in order to be truly happy. The answer to that question is obvious. Money is a means to an end. The real question is, have I chosen the right end for my life? And then, are my actions advancing my life to that end?
  13. One of my holdings, Rio Novo Gold, just acquired a property in Columbia. Symbol RN on the TSX. / RN-chart www.rnovogold.com Stock price is down right now.
  14. Companies can and do go bust every day regardless of how they prepare their financial statements. You can mark-to-market derivatives all you want but what causes companies to go bust is CASH. When you run out of cash, can't borrow more, and can't liquidate assets, nothing else matters. On the other hand, if you have lots of cash you can be completely, utterly insolvent and losing billions and it's no big deal as long as you have plenty of cash to cover your obligations as they come due. The point of all this is that it doesn't matter how you value assets and liabilities because value is subjective. The value of any particular item is different for different persons and businesses. And it is often the case that the market value of an asset is significantly less than the value of that asset to the business that owns it. You seem to think that a set of financial statements exists for the purpose of showing the liquidation value of a business at any point in time. That is wrong. The financial statements allow the business owners or officers to manage their business and ensure that it is functioning properly in fulfilling its goal of providing goods and services to human persons at a profit that rewards the owners. If the financial statements don't fulfill that goal, they are worthless for the purpose of managing a business. If I was an auctioneer of liquidating businesses I guess mark-to-market would make sense, but as a business owner and investor it doesn't make any sense. On the specifics of the investment banks you mentioned, I am ignorant, but I suspect their demise had little to do with their financial statements and a lot to do with bad management and taking on too much risk.
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