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AceofKY

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Everything posted by AceofKY

  1. AceofKY

    A question for gold bulls

    I hold gold mining equities, mainly as a hedge against currency devaluation. I try to find equities, however, that will increase in price even if gold stays even or goes down slightly (by increasing earnings) and yield leveraged upside to the price of gold.
  2. Any of you Brits talk to Kevin Bullock, CEO, this week? I met him at San Francisco and liked the story. He said he was flying out to London for the Mines and Money conference after San Francisco finished up. http://www.goldcrestresources.com/s/Home.asp Currently trading near cash levels. Not sure what to make of the chart. Seems like it needs a better base. Possibly still under pressure from tax loss sellers? Big Warning Sign: Kevin drinks scotch, not bourbon.
  3. AceofKY

    Do you like GEI? Help us grow

    I think we should extend an invitation to Gisele since she's obviously a goldbug. This is a task for one of you Brits with the James Bond accent...
  4. AceofKY

    The Copper thread

    Copper price is falling again. Warehouse stocks are rising. We've seen this movie before, haven't we? While everyone is talking about gold, let's resurrect this thread and find some good copper stocks to buy when the metal bottoms.
  5. AceofKY

    Pinetree Capital (PNP)

    Their stock price performance has been poor this year. Perhaps we can cherry pick some good ideas from their investee list: http://www.pinetreecapital.com/investees_sector.asp
  6. AceofKY

    Dynasty Metals & Mining

    Dynasty has been a big winner for me this year. I'm taking some profits here. It is still somewhat undervalued relative to peers by my figures, but the risk/reward considering location in Ecuador is much different now that the stock price is so much higher. Also I'm taking some profits in Jaguar Mining. I like their management a lot, but the stock price is getting ahead of itself in my opinion and could be exposed to a large drop when gold corrects.
  7. If the warrants are not traded on an exchange (and most of them aren’t) then I guess you could use a Black-Scholes calculator to get a “theoretical” value. Of course, you can exercise and convert to shares at any time after the hold period, right? Which brings up another question: Is it legal to buy/sell non-exchange-traded warrants privately? Or do you have to exercise the warrants? From what I have noticed watching many of these juniors, it seems like most people just short the common when they want to lock in profits on their warrant positions.
  8. More dilution? If I was a shareholder I would want a better explanation for this. Are they trying to out-inflate Bernanke?
  9. (This is good news but I think GORO is a hold at current price and market conditions. I was hoping to pick up more shares below $3.20 but that may not materialize now. Also I wonder why they are calling it an "internal analysis" since I know they had retained an independent consultant to prepare resource estimates? - Ace) Press Release Source: Gold Resource Corporation Gold Resource Corporation Increases Ounces at Its El Aguila Project in Oaxaca, Mexico Tuesday October 30, 10:38 am ET DENVER, CO--(MARKET WIRE)--Oct 30, 2007 -- Gold Resource Corporation (GRC) (OTC BB:GORO.OB - News), (Frankfurt:GIH.F - News) announced results from an internal analysis of its drilling to date at its 100% owned El Aguila Project in Oaxaca, Mexico. Estimates of mineralized material equal 1,836,497 tonnes grading 2.57grams/t gold (Au), 188.24 grams/t silver (Ag), 1.08% Lead (Pb), 2.91% zinc (Zn), 0.26% copper (Cu). This equates to 773,355 gold equivalent (AuEq) ounces, as detailed below. This mineralized material does not meet the SEC definition of Proven and Probable Reserves but would be equivalent to an estimate of Inferred Resource in Canada. Gold Resource expects to commence production at its El Aguila Project mid-2008, subject to obtaining remaining permits and regulatory approvals, completing necessary financings and equipment deliveries. Gold Resource Corporation's president William W. Reid stated, "We are pleased to have more than doubled our April 11, 2007 mineralized material estimate of 290,500 gold equivalent ounces to 773,355 gold equivalent ounces. Equally, based on the fact that our drilling continues to confirm and expand this very robust, high-grade epithermal system, we feel the exploration potential at El Aguila is great and may soon increase our gold equivalent estimate to over 1 million ounces." The mineralized material number is an in-place number without regard to recoveries. Gold Resource, like many in the industry, subscribe to the use of gold equivalent or AuEq as a means to present the aggregate value of polymetallic ore. Gold equivalent valuation quantifies the base metal percentages and precious metal ounces of polymetallic ore into one value. This calculation converts the metals quantity into its dollar value and converts that dollar value back into an equivalent gold value. Gold equivalent is a valuation calculation that places the emphasis on the total dollar value for polymetallic ore. The following mineral values were used in this gold equivalent conversion: gold at $650/ounce, silver at $13/ounce, lead at $1.60/pound, zinc at $1.30/pound and copper at $3.60/pound. Gold Resource Corporation's April 11 production decision was based on a targeted initial three year mine life and a capital payback of 6 months. Because of the increase in total ounces along with certain higher grade areas, such as El Aire Vein #2 which averages 0.83 AuEq oz/tonne and La Arista Vein #1 which averages 0.63 AuEq oz/tonne, GRC now targets 6 years of mine life with annual production targets of gold or gold equivalent levels as follows: Ounces in Gold (Au) or Gold Equivalent (AuEq) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 70,000 100,000 120,000 120,000 120,000 120,000 Gold Resource Corporation continues to move forward on all fronts as an emerging low cost gold producer. About GRC.......
  10. AceofKY

    Victory Nickel

    Crowflight sold off hard this past summer. Luckily I had lots of nickel cash (from Rio Narcea stake) ready to put to work at the right time. Their share price was pretty high during the nickel bubble, and then they got hit by the falling nickel price, credit crisis in August, and lots of el cheapo warrant expirations. I figure CML is worth somewhere around $1.4 - $1.5/share with current resource figures. They had a management change also within the past couple months, and it appeared to be for the better. Former Goldcorp executives, if I recall correctly. I never did really hear why the former CEO left; apparently he wasn't getting along with the Board? Yes, good news from GORO. I will post the PR on that thread.
  11. AceofKY

    Victory Nickel

    Here's a current chart:
  12. AceofKY

    Victory Nickel

    (below is a description of Victory Nickel I wrote a while back on a different forum. I thought I had posted this on GEI but couldn't find the thread - Ace) Msg: 2805 of 3950 9/10/2007 11:56:26 PM Author: AceofKY send pm · add member to favs · ignore Recs: 0 The Case for Victory Nickel Introduction Victory Nickel (symbol NI on the TSX) is a nickel exploration and development company created earlier this year from a spinoff of the nickel assets of Nuinsco Resouces. They currently have 3 Canadian properties with NI-43101 compliant nickel deposits, none of which are in production yet. Minago Deposit The Minago property is Victory’s flagship asset. The latest NI-43101 compliant resource is 49M tonnes of 0.516% measured & indicated nickel and 44.1M tonnes of 0.528% inferred nickel (exploration is on-going). An independent consultant, Wardrop Engineering, is preparing a bankable feasibility study which is scheduled for completion in mid-2008. The pre-feasibility study for Minago indicated a project NPV (8%) of $334M (pre-tax) and 23.1% IRR assuming $7.43/lb nickel. Initial capital costs of $286M are required to bring the project into production. The grades on this deposit are not high and much of the nickel is locked up in silicates (recovery won’t be very good), but the large tonnage compensates for this. The deposit is slightly lower in grade than Rio Narcea’s Aguablanca deposit, and it does not have the large percentage of copper byproducts that Aguablanca enjoys. Minago is substantially larger in tonnage than Aguablanca, however, and will be designed for at least twice the production rate. Minago also has a significant amount of frac sand that must be mined to access the nickel deposit using the open pit method. The frac sand carries a $46M NPV as a stand-alone operation. Furthermore, preliminary indications are that the Minago concentrate will be of higher quality than Aguablanca’s metallurgically challenged bulk nickel-copper concentrate. The latest drill results on the Minago deposit have confirmed much of the inferred resource. Thus, much of the inferred resource will be moved into the M&I category with the next NI-43101 report. Also, the assays indicate that the grade of the deposit increases as it gets deeper. Lac Rocher & Mel Properties These are much smaller, higher grade deposits. Their main value at this point would be to provide near-term production and cash flow to help offset the capital requirements for Minago. Inco is obligated to mill the Mel ore at their nearby facility ~25km away. My understanding is that Victory is currently waiting on Inco to decide whether or not to exercise a back-in option on Mel which would give 51% project ownership to Inco but would also required Inco to kick in the next $6M in project expenditures. Both properties need permitting before mining can commence. Financing The biggest problem for Victory right now is: How to finance Minago? Victory’s market cap is about C$90M right now. I discussed financing with one of the company officers, but he wouldn’t discuss too many details. When asked if they could debt finance at least 50% of the project, he said “yes” very quickly. For purposes of valuation below, I’m going to say that a conservative scenario would be an equity financing for the other 50% of the project which would likely mean doubling the number of current shares. Current Capitalization 173.1M common shares, 12.7M options, 3.1M warrants = 188.9M fully diluted shares Management Ownership Management and the Board currently own about 8% of the outstanding shares. Management is shared with Nuinsco Resources. It should be noted that Nuinsco’s share performance over the past 5 years or so has been underwhelming. Also note that Nuinsco itself owns a significant quantity of Victory’s shares. This could be a negative if Nuinsco decides to cash in that investment. Conservative Valuation (in US$) Working Cap, FD: ~$20M Longterm debt: none (yet) Minago NPV(8%): $200M (this figure has approx 35% subtracted out for taxes, which should be conservative) Mel & Lac Rocher: No value assigned Estimated (hopefully worst case) number of shares after financing: 380M Value: ($20M + 200M)/380M = $0.6/share Victory’s current share price stands at ~$0.5/share, so this is not a very exciting valuation. But this valuation should be worst case. Let’s consider the upsides: 1. Nickel prices: Minago is highly leveraged to nickel prices. $10 nickel bumps the NPV up to ~$490M or about $1.3/share. Current nickel price of about $12, if it could be relied upon for long term, bumps NPV up to about $1000M or about $1.7/share (this would be a 340% gain from current share price). 2. Debt financing: If they can debt finance 75% of the project rather than 50%, this would yield a share count somewhere around 275M shares which takes the valuation from $0.6 to $0.8/share. 3. Exploration upside - It appears that more resource may be brought into the bankable feasibility reserve category which will bump NPV up. 4. Mel & Lac Rocher: Both have the potential to significantly reduce the amount of financing required for the project. 5. Takeover prospects: This deposit is screaming for a mid-tier with free cash to take it over from Victory. Nickel sulphide deposits are in high demand. Consider Lionore, Rio Narcea, Inco, Falconbridge - all bought out within the last couple of years. Technicals I am not a technician but Victory’s share price has been falling significantly on nothing but good news and good exploration results. The drivers of this have been the popping of the nickel bubble and the thrashing given to all juniors in August. Some are concerned about a US economic recession. It looks like selling pressure is drying up, however, in the weekly chart judging by the falling volume (sorry I do not know how to paste in a chart). Conclusion Victory looks like an interesting investment. Production of any sort is over a year away, so it remains exposed to further downside. Management’s ability to finance the deposit without excessive dilution will likely determine how high the share price will go in the future. One good thing is that the equity financing will not be needed for another year so it is likely that the share price will recover between now and then, thus significantly reducing the dilution. Victory is one of the better looking options if one is looking to invest in a junior Canadian nickel miner. Good Luck and Do your own DD, Ace delete my post e-mail to a friend printer-friendly add post to favorites
  13. AceofKY

    GLR Resources

    I emailed the questions to them (Kasner and the IR guy) on Sunday and have not received a response yet. GLR does appear to be undervalued but if management can't handle a few questions from a potential investor in a timely fashion than it makes me wonder about their ability to handle a $46M construction project. From their latest press release: "In a Press Release dated August 21st, it was noted that Investec Bank had retained Micon Engineering to complete a due diligence review of the Goldfields feasibility study. The final comments from Micon Engineering have now been received by Investec Bank. Although some minor points are still to be addressed it is of the opinion of GLR there are no issues that will seriously affect the Goldfields project or its ability to pay back debt financing." Not sure why they put this in the PR. Just makes me wonder what the "minor" points are and why they haven't locked up financing yet?
  14. AceofKY

    SILVER

    GPR posted production increase last quarter: Great Panther Press Release I haven't checked the fundamentals on this one, but it looks like it's getting hit by a double whammy of lots of el cheapo warrants expiring near the end of the year and probably tax loss selling too. Need to add this one to the research list for possible end of year bargain...
  15. AceofKY

    GLR Resources

    1. What companies did management previously work for? Specific accomplishments? 2. According to the Management Information Circular, Mr. Kasner was apparently fined this year for trading while under private placement restrictions. According to the website he has been in this industry for over 40 years. Why would he not be aware of the trading restrictions if he has been working in the industry this long? 3. Why so much turnover in the Board of Directors recently? 4. What is the status of permitting and environmental compliance? 5. Are there any aboriginal groups with interests that could delay/frustrate permitting approval? 6. How much of the construction capital will be debt financed and how much will be equity financed? 7. Silver is mentioned in feasibility study as being recovered historically by Cominco from the old underground Box mine. Is there any silver contained in the open pit deposit? If so, is it recoverable? P.S. - The economics on this one look pretty good although it is low grade ore. I am interested. Need more info on financing. P.P.S. - There are ~2.3M in-the-money warrants expiring in November. Now thru November might be a good time to buy while warrant holders short into the expiry??
  16. AceofKY

    GLR Resources

    wow...that's only $27 in market cap per M&I ounce. The average junior trades somewhere around $75/oz. Wonder what the catch is? I will try to research some this coming week.
  17. Yaay! I finally figured out how to add a graphic to a post. Interesting volume in SRZ today, but from what I can tell it looks like one large block trade. Latest news is that production is still on schedule for November startup. I was fortunate enough to load up on that bottom in August...
  18. Yes - the surface rights risk just went away this morning, not to mention the good drill intercepts. I think I forgot to mention above that, outside of the initial El Aguila open pit deposit which is just gold/silver, there are significant potential base metal byproducts (zinc, lead, copper). GORO intends to finance a recovery circuit for these base metals using cash flow from the open pit deposit. Ace Press Release Source: Gold Resource Corporation Gold Resource Corporation Updates Progress at Its El Aguila Project in Oaxaca, Mexico Monday October 8, 6:00 am ET DENVER, CO--(MARKET WIRE)--Oct 8, 2007 -- Gold Resource Corporation (GRC) (OTC BB:GORO.OB - News) (Frankfurt:GIH.F - News) is pleased to announce the signing of the important local Ejido (agrarian community) agreements to allow for mine development at its El Aguila Project in the southern state of Oaxaca, Mexico. Additionally, drilling continues to return high-grade intercepts from its El Aguila Project. These high-grade intercepts include 11 meters of 19.57 grams/tonne (0.63 oz/tonne) gold equivalent at its La Arista area; 6 meters of 16.47 grams/tonne (0.53 oz/tonne) gold equivalent at its El Aire vein; and 1 meter of 43 grams/tonne gold and 359 grams/tonne silver (1.63 oz/tonne gold equivalent) at its El Aguila open pit deposit. The El Aguila Project is targeted for production mid-2008 subject to timely obtaining all required permits and regulatory approvals, necessary funding and equipment delivery schedules. The agreements between the local San Pedro Totolapam Ejido and Gold Resource Corporation's wholly owned Mexican subsidiary have been signed and filed with the National Agrarian Court and provide for an initial 20 year operation with the ability for extensions. These agreements represent local approval and support for Gold Resource Corporation's development of a mine at its El Aguila Project. This local approval is a necessary and important step to obtain federal mining permits. Recent drill highlights include: La Arista area; Hole 7083 (-45 deg) -- 11 meters of 2.64 g/t gold, 167 g/t silver, 2.97% lead, 6.66% zinc (or a gold equivalent* value of 19.57 g/tonne or 0.63 oz/tonne) El Aire area; Hole 7285 (-60 deg) -- 6 meters of 4.91 g/t gold, 274 g/t silver, 1.22% lead, 2.85% zinc (or a gold equivalent* value of 16.49 g/tonne or 0.53 oz/tonne) El Aguila open pit deposit; Hole 7229 (90 deg) -- 1 meter of 43.10 g/t gold, 359 g/t silver (or a gold equivalent* value of 50.69 g/tonne or 1.63 oz/tonne) and -- 2 meters of 9.59 g/t gold, 125 g/t silver (or a gold equivalent* value of 12.13 g/tonne or 0.39 oz/tonne) Source: Gold Resource Corporation (click to enlarge) Recent drill intercepts Assays by ALS Chemex, Vancouver, BC Canada Gold Resource Corporation's president William W. Reid stated, "Our drilling continues to expand the high-grade El Aire vein which is still open in both strike and depth. The La Arista area shows both open pit and underground mining potential. We continue to be impressed with the area's multiple high-grade drill holes with intercepts of over one half ounce gold equivalent per tonne. This expanding area is also open in all directions and has the potential of becoming GRC's third high-grade deposit at our El Aguila Project." Mr. Reid added, "Additional mineralization, as high as 43 grams per tonne gold and 359 grams per tonne silver over 1 meter, has been intercepted with infill drilling at our El Aguila open pit. We are also adding ounces with step out drilling. The El Aguila shallow high-grade open pit is where the initial production will come from." "We are very pleased with the local support for our mining project and embrace the opportunity for our project to benefit the local communities. And drilling continues to bolster our belief that the El Aguila Project is potentially a very large, robust and high-grade epithermal system. We are consistently adding ounces and moving forward on all fronts as an emerging gold producer," concluded Mr. Reid. About GRC Gold Resource Corporation is a mining company focused on production and pursuing development of gold and silver projects that feature low operating costs and produce high returns on capital. The Company has 100% interest in four potential high-grade gold and silver properties in Mexico's southern state of Oaxaca. The company has 28,249,552 shares outstanding and no warrants. For more information, please visit GRC's website, located at www.Goldresourcecorp.com and read the Company's 10-KSB for an understanding of the risk factors involved. This press release contains forward-looking statements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. When used in this press release, the words "anticipate," "believe," "estimate," "intend" and "expect" and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, without limitation, the statements regarding Gold Resource Corporation's strategy, future production, future expenses and future liquidity and capital resources. All forward-looking statements in this press release are based upon information available to Gold Resource Corporation on the date of this press release, and the company assumes no obligation to update any such forward-looking statements. The Company's actual results could differ materially from those discussed in this press release. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the company's 10-KSB and Form SB-2 filed with the Securities and Exchange Commission. Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=596243 Contact: Contact: Jason Reid Gold Resource Corporation 303-320-7708
  19. I agree, they really need to clean up their share structure. What happens to the 217.5M warrants in a reverse split? I guess the warrants would be consolidated also, wouldn't they?
  20. AceofKY

    SILVER

    Frizzers, Can you list your favorite silver stocks for us? Some of the juniors look a lot cheaper after the August meltdown. Thanks, Ace
  21. Dr B, If we agree that the dollar will take a dive, is gold the best way to financially benefit from the dollar's demise? The problem I have noticed over the past couple years is that gold can be easily manipulated due to all the central banks holding tonnes of it. Would a different precious metal (platinum, silver?) be more likely to respond to a fall in the dollar?
  22. AceofKY

    Geovic Mining

    Correction: "world's largest cobalt resource" should say "perhaps the world's largest cobalt resource." There are 5 deposits which they haven't published resource figures on yet because they are only defined by test pits spaced 1 km apart. No value, however, was assigned to these deposits in the above valuation. Note that Tenke has a larger NI43-101 compliant cobalt resource in their DRC copper resource.
  23. Typically I make my purchases when the stock is falling in a correction. I will assume that the same thing applies when a stock is falling: look for volume to start drying up. Please show the five wave structure.
  24. 1. For the fundamentals investor, what TA should be looked at to avoid buying at a bad time? 2. For the fundamentals investor who feels that his equity has now risen so much that it is substantially overvalued, what TA would indicate a "top" or good place to sell?
  25. Here are some company details; this could be a good way to play the plummeting zinc inventory levels: 1. SRZ should be in production before the end of this year, and should be in commercial production early next year. 2. Market cap approx US$140M of which ~US$105M is working capital ($70M of this will be used for mine restart capex). Debt is ~$51M. 3. Primary asset is a zinc mine in Tennessee that closed a few years ago due to low zinc prices. All the equipment is still in place and is being restored to operation. They have contracted with Dynatec to get the mine back to operation. 4. Mine life of 6 years. 5. Inferred resource will add another 9-10 years of mine life if zinc prices stay high. 6. Cash costs are estimated at $0.77/lb zinc. This includes royalties and G&A but not corporate taxes. It also does not include germanium byproduct credits. 7. At estimated 2008 production level, SRZ will generate higher revenue next year than its current market cap, even if zinc prices fall to $1.15/lb. Payback will be less than one year if zinc stays at current prices. 8. SRZ is basically unknown right now other than the few institutions who participated in their recent IPO. The company was somewhat difficult to value because they have not had a financials release post-offering and their website isn't fully updated yet. Per email exchange, they are working on putting together a comprehensive investor relations program. 9. Their website is hard to find; here's the address: www.sra-corporation.com 10. For those of you invested in Breakwater, SRZ has higher leverage to zinc than BWR. 11. I don't think they have a pink sheet symbol; I had to pay my broker extra to purchase directly on the Toronto venture exchange. Volume is very light so use limit orders.
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