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AceofKY

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Everything posted by AceofKY

  1. Hi folks, I haven't posted here in a very long time just due to being very busy with running my business. I was fortunate enough to see Dominic at PDAC and resolved to try to come back here more. Hopefully everyone is doing well. Here is what I currently have in my portfolio in order of largest to smallest positions: 1. Gold Resource Corp (GORO): I've sold about 1/3 of my position since this went up about 500-600% for me. Pretty expensive stock now. Pays a monthly dividend. 2. Fronteer Gold (FRG): This equity is being taken over by Newmont but I'm still holding to get the free shares of the spinoff company. Probably not worth buying now that the takeover has already been announced. Watch for the spin-off explorer that will be called "Pilot Gold" and run by the same guy Mark O'dea. 3. Hecla (HL): This is a good mining company in the Silver Valley & Alaska, primarily silver but also big amounts of gold, lead, and zinc. I think they are still undervalued and I wouldn't feel bad about buying some right now. 4. Alacer Gold (ASR.to): Gold miner in Turkey & Australia. Probably still a buy but not spectacularly undervalued. 5. Silver Wheaton (SLW): This is a good company but very expensive. I wouldn't buy it now. My position came from the takeover of Silverstone several years back. I've been selling this position down. It will basically track the price of silver with approximately 1.5x leverage. 6. Santa Fe Gold (SFEG.ob): A junior gold/silver miner in Western U.S. I think this company is a good buy right now but their performance is still unproven so it could go either way. If they are successful it will be a 3 to 4 bagger at least. They are currently taking over Columbus Silver and I've been buying shares in the latter to capture a few % in arbitrage. 7. Nevsun (NSU): This is a copper/gold miner in West Africa. I bought more of it in the past few weeks as the price took a big dip. I'd say it is a buy anywhere under $8/share. 8. Rambler (RAB.v): This is a copper/gold junior building a mine in Newfoundland. I've been buying it over the past couple months. Be prepared to wait for a couple years for the payoff. Very small and illiquid. 9. Rio Novo Gold (RN.to): Junior gold miner in Brazil that I just became aware of after the PDAC conference a couple weeks ago. I think it's a buy. 10. Silvercrest (SVL.v): This is a junior silver/gold miner. I'd rank it a hold right now as the price has already gone up substantially. Performance still unproven. Good luck to all, Ace
  2. AceofKY

    Jaguar Mining

    Volume has been very good for the last couple of days. Rumours of a takeover, apparently, from what I gather from the Stockhouse board. I wouldn't put much faith in the rumour; Yamana has its plate full for a while and I can't imagine who else would be interested in JAG's fairly small Brazilian assets. I am ready to take some profits on this one, but I might hold on a little longer with this volume...
  3. AceofKY

    Geovic Mining

    Geovic Mining (GMC.v on the TSX venture exchange) looks very interesting. First, Geovic owns a 60% share in the world’s largest cobalt resource in Cameroon. There is also a significant amount of nickel and manganese in the deposit. A large percentage of the remaining 40% share is owned by a corporation that appears to be controlled by the Cameroon government, so there is significant incentive for the government to advance this deposit. The first of seven deposits has been evaluated through the prefeasibility stage and this report can be downloaded on SEDAR. The prefeasibility uses conservative numbers, $16.83 Co and $5.78 Ni, for the base case economic evaluation scenario. Even better, the reserves of the deposit were calculated on $12 Co and $3.50 Ni yielding a 21 year mine life. The in situ value of the first deposit is about $12.8 billion using the base case numbers. This is very misleading, however, since the net payable metal recoveries will be very low (~57.2% for Co and 15.4% for Ni). I was hoping that these recoveries were conservative assumptions too, but the COO confirmed that we will not likely see much more than 58% for Co and 17% for Ni due to metallurgical issues and the proposed process that maximizes Co extraction at the expense of Ni extraction (which yields the optimum NPV & IRR). Base case NPV (Geovic’s 60% share) is about $317M and IRR is about 77%. This does not include any debt financing, but they will definitely be financing a portion of the project via debt which will increase the NPV and IRR. Capital costs will be very low at around $111M. Financially, this is a low risk high return project. Compare to projects such as Novagold’s Galore Creek where it will take a $2 billion capital expenditure to generate approximately the same NPV and with a low IRR. There are 6 other deposits, one of which (Mada) has a NI43-101 compliant inferred resource. Let’s take a stab at a very conservative valuation. The objective here is to find the absolute minimum this company’s assets are worth. If we can buy the assets alone for less than they are worth, then there is very little risk to our investment. The rest is upside. Numbers are in US dollars. #Shares Out: ~101M of which ~11% is owned by management #Shares FD: ~135M (no more equity is needed to finance the project) Working Cap, FD: ~$156M or $1.15/FD share No debt (yet) Nkamouna deposit base NPV from prefeasibility (x 60%): $317M or $2.34/FD share Mada deposit value: This is the 145M tonne inferred resource which hasn’t been thru feasibility yet. Looking at the nearby Nkamouna deposit, the NPV ended up being about 4% of the in situ value of the deposit. Let’s be conservative and use 2% of the Mada in-situ value. This yields $242M or $1.79/FD share. It should be much higher since they will share the same infrastructure. Base case value: Working Cap – Debt + Nkamouna NPV + Mada Estimated NPV = $5.28/FD share. Geovic is currently trading at approximately US$3.3/outstanding share. Conclusion: We can buy Geovic for approximately a 37% discount to a very conservative estimate of its asset value, which implies a minimum share price appreciation of 60% needed just to get back to a reasonable valuation of assets. All of the upside with respect to high commodity prices, additional deposits, reinvestment of free cash flow, etc, is a bonus. This is not a marginal resource that can be mined only when commodity prices are high. This is the type of resource that the big boys look for. The only significant risk seems to be Cameroon, and it seems to be one of the more stable countries in Africa. Ace
  4. No, Thomas' objection to usury (which by his definition was ANY interest) derived from the Greeks - Plato & Aristotle. There is little support for the prohibition of ANY interest either scripturally or in the early Christian Tradition. There is a little, however, and therein lies the debate. The explanation of the sin of usury needs to be better developed by moral theologians. It is easy to see it when it is blatant, but it is not so easy to draw a dividing line in any one place. As for the crusaders, if it wasn't for them we'd both be kneeling towards Mecca right about now.
  5. The Albigensians believed that the atoms you are made of are evil and should be destroyed - preferably by suicide through starvation. There was certainly no merit in killing them (and this was at least as much of a political extermination as a religious one), but if the Albigensians had their way none of us would be around to debate the issue.
  6. The heretical portion of the teachings of Nestorius (which has to do with the unity of human and divine natures in Christ - a subject only Christians would understand) were rejected at the Council of Ephesus, and again at the Council of Chalcedon. The successors of the apostles of Christ obviously weren't impressed with the so-called "direct inheritance from the earliest Jesus movement."
  7. Usury is still considered immoral. There is no strict definition, however, of what interest rate constitutes usury. Predatory lending practices would certainly fall under the prohibition.
  8. If there was a good return available, the market would have directed the available capital towards it (provided government stayed out of the way.) This is why you see rail transportation in densely populated cities but not in Kentucky. The cheap and easy credit VASTLY DISTORTS the calculation of return on investment as it lowers the interest rate and makes marginal or bad projects look profitable. With cheap and easy credit, there is no way to identify what the good areas are. If the market is allowed to set interest rates, it is much easier to determine which projects should be executed with the capital available. Obama is just going to throw billions (probably trillions) at infrastructure projects until he collapses the currency. It is quite clear that he is about as bright as a burnt out light bulb.
  9. The dollar is going to collapse regardless of energy policy. There is no other viable way without someone who would immediately start axing federal spending, balance the budget, and start paying down debt (and it's quite clear that's not going to be Obama.) We can only hope that the welfare/warfare federal government collapses along with the dollar. Neither you nor anyone in government knows what the "right" price signals are. Gas is cheap, so we burn it. When it gets back over $4/gallon, we cut back or burn something else. When it goes higher than that, we'll start using completely different technology. Now if you want to say that many of us should use less fuel so that we can give some fuel to people in El Salvador or wherever who don't have any, now you're starting to make sense. But this is a moral problem - not an economic problem. And if we are going to talk about moral problems, we have to come to much more fundamental agreements about people, goals, priorities, etc. and many of those are ideas that we don't share with people in Europe or Hong Kong or China. All you seem to be saying is that we should cut back on burning energy for the sake of burning less energy. This doesn't make sense to me. Why should we dig a bunch of iron ore/steel out of the ground to lay rail tracks so we don't have to suck a bunch of oil out of the ground?
  10. Bubb, the McMansion building boom was primarily fueled by debt which was enabled by the Fed forcing interest rates to a very low level. We've already seen what happens when the government gets involved in the auto industry with the whole ethanol debacle. No one is buying your ideas because government is the problem - not the solution. The peak oil problem (if it is really a problem) will be solved by the market. That was quite clear this summer when we stopped buying inefficient cars when fuel prices went up. I have no problem with you making social statements. What I have a problem with is you wanting my money to implement your social statements when it is not clear at all that we have common interests. When Europe figures out what a human person is then we can talk about furthering the common good of humanity and how the reduction of energy usage may possibly further that goal. Until then, please use your own capital to build railroads and I'll keep driving my truck. It is not my goal in life simply to reduce the amount of oil I burn. It's just black stuff in the ground. We'll keep using it as long as it's the cheapest energy source.
  11. FR - high cost miner; current prices likely have all three of their mines operating in the red. Options on silver price would likely be safer. EDR - I don't follow GPR - I haven't reviewed their status lately SLW - Watch out for counterparty risk. Highly liquid if you are a trader rather than an investor. Bill Cara likes them. SST - I own some of this. Neves-Corvo may shut down if copper keeps falling but I think the Minto and Capstone streams should be safe due to hedges in place. Much less debt than SLW. SSRI - I haven't reviewed their status lately. PAAS - be careful here, PAAS doesn't give sufficient disclosure to determine how exposed their mines are to base metal price plunges CDE - A bunch of crappy assets and are in danger of losing their NYSE listing You are missing Hecla on your list. They currently have a financing/loan problem but if they get that straightened out then I think Hecla will emerge as one of the stronger silver miners b/c they have two great assets in Greens Creek & Lucky Friday with costs in US$. Also you are missing GORO which is basically half gold half silver. You have to be very careful with silver miners right now because many of them are dependent on lead, zinc, or copper for a big part of their revenue.
  12. Yes, this is the regulatory paperwork needed to pull down an equity financing open to the public. They do need cash as they are basically out of working cap & at their credit limit, but they don't need nearly $200MM. Dolores should be cash flow positive very soon. I think Mark is getting his ducks in a row for an acquisition.
  13. A step forward...off a cliff? His first actions are going to be reinstating federal funding of embryonic stem cell research and bailing out the automotive industry - all with taxpayer dollars. If only we could ship these intelligent politicians to the UK since you guys seem to like them so much. Here is a link to the results map. Click "County leaders" to get the true picture of the situation. http://elections.nytimes.com/2008/results/president/map.html It is obvious that the heartland of America voted for McCain and the urban areas voted for Obama. Gee, I wonder why? I don't understand why people in the UK are so obsessed with US politics.
  14. 1. Good pick with Minefinders 2. I concur strongly with Frizzers (I'm having trouble with the new name) on GORO; it is my largest holding 3. I like Hecla better than First Majestic here. They have better assets IMO and lower production costs (although you will see their cash costs go up due to the base metal credits). First Majestic has been executing well and it is on my watchlist, but I'm waiting to see if they can convert all that drilling they've been doing into mineable resource. They really need some more reserves. 4. I like Silverstone here too, and I think the forthcoming bad news of Aljustral shutting down is probably already priced in. Same business model as SLW. 5. Fronteer (FRG) is another I've been buying; they're more of a pure explorer but they have huge cash on hand (~$84MM) and the burn rate is probably only $15-20MM/yr. EXCELLENT assets that are extremely undervalued right now. It is starting to look more and more like they've found another big gold trend in Nevada (Long Canyon) separate from Carlin & Cortez. Pretty much everything is cheap right now.
  15. AceofKY

    Ethical Investment+World Peace

    I too believe in regulation of companies and corporate responsibility. And I can certainly agree that Monsanto has a quite checkered history. I think one would have a hard time arguing that Monsanto is an unethical company right now, however. We don't drive looking in the rear-view mirror. Neither should we invest that way.
  16. AceofKY

    Ethical Investment+World Peace

    Paul VI had a very famous saying: "If you want peace, work for justice." It is difficult to think of ways to invest that promote peace, but it is not so difficult to think of ways to invest justly. Peace, of course, is the fruit of justice. One example that comes to mind: investing in capital projects in developing nations. Now is a particularly important time for many of these projects, as investors around the world are withdrawing capital support.
  17. AceofKY

    Ethical Investment+World Peace

    Yes, there is something wrong with the concept of "ethical" investing as one choice amongst others. A company who is engaging in unethical actions should be stopped and penalized. Unethical investment options should be outlawed. I'm not sure why you seem to think Monsanto is an unethical company in general, however.
  18. That is quite debatable. See the Science of Happiness thread. Some of us feel that there is more to happiness than psychology.
  19. AceofKY

    Are the proletariat ready to take power?

    No, unfortunately, that is not necessarily the case. In fact, he may even enroll in a 12 step program designed to help him change his life so that he can achieve the happiness he desires. This example is probably not a good one as it is confused by addiction in which case one could argue that he is psychologically not making a free choice. I have totally forgotten what the original point of this thread was.
  20. AceofKY

    Are the proletariat ready to take power?

    Of course we think using pictures, words, and feelings. What kind of an argument is that against the mind? The pictures, words, and feelings don't do the thinking. (Words, by the way, are clearly the product of more than just sense impressions.)
  21. AceofKY

    Are the proletariat ready to take power?

    Nihil in intellectu quod prius no fuerit in sensu. Google is great, eh?
  22. AceofKY

    Are the proletariat ready to take power?

    Correct; as humans we certainly need our senses as part of the learning process. Lonergan's process is: Experience -> Insight/Understanding -> Judgment = Knowledge Remember the ancient Thomist maxim: nothing is in the intellect that wasn't first in the senses. (sorry I don't remember the latin.)
  23. AceofKY

    Are the proletariat ready to take power?

    It is brown. Judgment requires the use of the senses, but also the use of your mind. A colorblind person may even make a mistaken judgment about the color of his door. However, after making several of these mistakes he learns to not trust his sense of sight in that circumstance. This is due to insight and judgment performed in his mind - where he recognizes that his sense faculty is unreliable. How do you know that quarks exist? Have you ever seen, heard, smelt, touched, or tasted one?
  24. AceofKY

    Are the proletariat ready to take power?

    Are you really proposing that our insight and judgment is performed by our senses of sight, taste, hearing, smell, touch?
  25. AceofKY

    Are the proletariat ready to take power?

    Well, I didn't make the definitions. You can complain to Aristotle and his predecessors if you like. A human soul, by definition, must be spiritual (if it exists.) This is because it is specifically posited to explain what we feel cannot be explained by mechanics/physics. I am certainly waiting on someone to explain the attributes of persons that we currently attribute to the soul using pure physics. If this can be done, however, it would be best to name it something else to avoid confusion. We certainly can consider happiness and the principle of life to manifest from physical microentities. When you can do this, I assure you you will win a Nobel prize and may make an atheist out of me.
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