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  1. Gold Resource Corp. (GORO) UPDATE - 3/15/2019 GORO / Gold Resource Corp... All : 10-years : 5yr-W : 2yr-D : 6mo /10d : vs-etc - Last: $3.96 Sym : Price: MktCap EntVal : Ebitda : EV/eb.: Earns : PER-: Div. : Yield : BkVal : P/BV : Gold : 13.01: $22.7b : $29.4B: $3.06b: r:9.60 : (1.32): N/a- : $0.16 : 1.22%: $6.50: 200%: NEM : 33.15: $17.7b : $20.2B: $2.74b: r:7.36 : $0.64: 51.8 : $0.56 : 1.68%: 19.70 : 168%: Goro: $3.96: $243M: $239M: $33.2M r: 7.18 : $0.16: 24.8 : $0.02 : 0.51%: $2.16 : 183%: Ace of KY writing: (the following is an excerpt from an Update I have prepared for family and friends. GORO should be known already amongst GEI investors as it has been mentioned several times in the past on this forum - Ace) Introduction Gold Resource Corporation (ticker: “GORO”) is a junior gold exploration and development company headquartered out of Colorado, USA. GORO shares are currently trading on the over-the-counter bulletin board market. Their website address is: www.goldresourcecorp.com Capital Structure and Chart GORO currently has 28.2M shares outstanding, 2.6M unexercised options, and 0 warrants for a fully diluted 30.8M shares. Current market capitalization is approximately $107M. The company intends to list its shares on the AMEX exchange, but this will likely not happen for at least a year. <chart omitted in this forum due to author's incompetency with respect to adding images to a post > Management GORO was founded by and is managed by the Reid family which managed US Gold prior to being bought out by Rob McEwen. I have not personally met the Reids, although I did spend some time on the phone with Jason (the CEO Bill Reid’s son). He was very forthcoming and answered all questions professionally. The Reids are spoken highly of by <Frizzers>, and their recent activity and shareholder register indicate that they know how to raise money in London and the European capital markets. The Reids hold about 32% of the outstanding shares of GORO, so they will share their shareholders’ fortune (or pain). Also, Jason (and the latest GORO presentation) insists that they are committed to paying dividends as soon as they are able. Assets GORO’s primary assets are a group of gold/silver deposits in Oaxaca, Mexico. The most advanced of these is the El Aguila deposit. GORO made a positive production decision on El Aguila earlier this year. A feasibility study has not been commissioned on the El Aguila project, but an independent scoping study from 2004 is available by contacting Jason Reid. GORO insists that there are currently 3 years of mineable resource, although the lack of a feasibility study has prevented them from classifying any of the resource as reserves. Additional resources are currently being proven up by drilling, and an updated resource report is due any day now from their consultant. There have been several nice intercepts over the past few months, and Jason indicated that drilling will continue for the foreseeable future. Production is currently envisioned at 70k, 90k, and 100k ounces for the first three years, respectively. The scoping study indicated that the average cash cost of gold production would be approximately US$107/oz. Costs have escalated substantially since 2004, but it should also be noted that the project is very sensitive to ore grades and the drill results subsequent to 2004 indicate that the ore grade should be in the 11g/t gold equivalent area. The scoping study indicated $82.4/oz costs at these grades, so GORO’s forecasted $100/oz cash cost appears to be reasonable. Also, the scoping study was performed using a 750t/d production rate whereas GORO has decided to increase the capacity to 850t/d. Capital costs have increased significantly. The company is currently forecasting $20M in capital spending to bring the mine into production versus the $11M scoping study estimate. Unfortunately, this type of inflation has been experienced by all in the construction industry. Financing Jason indicated that the construction of El Aguila will be 100% equity financed (and that there is significant interest from existing institutional shareholders to participate in this financing.) Management believes that their first mine should be equity financed due to the terms required of a company with no current cashflow (such as hedging and high interest rates) and also to avoid any problems if startup delays are encountered. Future mines would include debt financing on better terms. My estimate is that GORO will need to raise at least $25M by the end of the year to finance the construction of El Aguila and continue drilling. Let’s assume $30M to be conservative and to account for any subsequent financing needed next year to carry them through to positive operational cash flows. Since their shares have been trading at around $4 for the past few months, my estimate is that approximately 8M shares will be issued along with 4M warrants. This would bring GORO’s fully diluted share count to 42.8M shares, which (with only 4M warrants) would still be very tight for a 100k oz gold producer. Valuation Since there has not been a formal feasibility study prepared for El Aguila, I created a valuation for the project based on the discounted cash flows (DCF) method. The valuation revealed that the first three years of production do not justify the current stock price on a DCF basis. They need to prove up approximately 500k more gold equivalent ounces to justify the current stock price on a DCF basis. This seems reasonably achievable with the drill results that have been released this year (there are multiple deposits that would supply feed to the El Aguila mill.) Most gold producers (especially low-cost producers) are valued at a significant premium to DCF or net asset value (NAV). Thus, it would not be unreasonable to expect a double in the stock price if and when GORO has proven it can produce low-cost gold and increases its resource (potentially by late next year). Assuming $700 gold and 42.8M shares, GORO is currently trading at about 3 times anticipated 2009 cash flow. Risks GORO is a risky investment for the following reasons: 1. GORO’s resources are non-NI-43-101 compliant. Thus, even though they have retained an independent consultant to evaluate the resources, it is unlikely that the deposit will attain the same market value that a 43-101 deposit would carry. It is obvious that the Reids are managing GORO to become a producer rather than a takeover target. 2. GORO only has one independent director. This concern is somewhat mitigated by the fact that management owns almost 1/3 of the outstanding shares. Jason did indicate, however, that they would likely bring on an additional independent director within the next year or two. 3. Permits and surface rights are not yet in place. This is a concern with all mining companies. GORO does not anticipate any problems obtaining their permits in a timely fashion, however. 4. Price of gold is currently at 30 year highs. A correction is likely as the central banks try to keep the price of gold under control. Depending on the price of gold, one may likely be able to purchase GORO at a lower price within the next few months prior to construction completion. Investment Decision I purchased a small position in GORO this past week. GORO has had a significant appreciation in share price this past year. I would like to see the share price correct some prior to securing a larger position. Unfortunately, with gold well over $700/oz it is difficult to find any good purchases in the sector. If we get a good correction in the price of gold over the next month or two, it may result in a better opportunity to purchase GORO. The primary reason for being careful with GORO, however, is the low quantity of in situ resource it currently has on the books. The upcoming resource report will give us a better picture of GORO’s future cash flows beyond the next three years.
  2. 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.
  3. Congratulations Dominic....with the coverage on ZeroHedge today I think it can be considered to have gone viral now!
  4. 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.
  5. I picked up a few junior miner ideas at the PDAC which I will try to write up in the next week or so.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. 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?
  14. 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.
  15. 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.
  16. Yes, but our assets get recorded at cost and then depreciated over a time period for tax purposes. We have zero asset value for our vehicles, for example, because they are all fully depreciated.
  17. I disagree. Financial assets have an underlying value to the businesses that own them that may or may not be accurately reflected in market value at any given time. And no one is in a better position to evaluate that value than the managers who run the business. Take an example of a mortgage that a bank loans to a person so that they can buy a home. That loan is presumably recognized as an asset by the bank (you'll have to forgive me for not being intimate with the details of bank accounting, but the general concepts hold true for any company.) That asset will generate earnings for them over time as the homeowner pays interest on the loan. I don't know exactly how they value such assets, but if it were me I'd value it (for internal management/investment purposes) the same way I do any other investment - via a net present value estimate of future earnings. The accounting standards, however, probably require some other method of recording the asset value - probably just the exact amount of cash that was loaned out. So right away there is a disconnect between what the asset is really worth to me as a business and what the asset is valued at on a set of GAAP financial statements and we haven't even talked about the market yet. At any given day, the market value of that asset could easily fluctuate +/-10%. If it was a large asset, there may even be "no bid" on any given day (remember late '08?). No one can run a business, financial or otherwise, with asset values changing from 0-110% on any given day. The asset values aren't really changing that much for the business - it's just the market prices that fluctuate so much. Marking to market, then, just introduces a hell of a lot of volatility into a balance sheet. For some that may not matter, but for a bank that is required by regulators to maintain a minimum capital ratio or be forced into liquidation - it certainly does matter. Now you are concerned that the homeowner has missed a payment or two on his loan and that the bank still reports the asset at full, unchanged value. I agree that there should be some partial reduction of asset value at that point (assuming the GAAP value wasn't way too low to begin with) as it is clear that the future earnings won't be as high as orginally thought or may be negative. If the bank hides that - that is fraud. It has nothing to do with mark-to-market. The market doesn't have a clue what the asset should be valued at because it will take many months to even get the homeowner evicted. And each situation is individual. Maybe the homeowner just had a medical incident, missed work, and will be back to work in another month and will be able to make their payments again - in which case the asset is still worth most of its originally expected value. Or maybe you are concerned that the market value of the underlying property has gone down and therefore you feel that the bank should write down the asset. The problem in this case is with how you are valuing assets. For a functioning business (i.e. not a business in liquidation), the assets are valuable because of their FUTURE earning power. As long as there is confidence that the homeowner can/will make their payments, I see no reason to reduce the asset value of the loan. I don't invest in banks because I don't have the time to learn their business and their assets and understand their true value. No one expects GAAP accounting to be able to provide for truly understanding the underlying value of the business. And it is quite clear to me that mark-to-market wouldn't even come close. If I thought mark-to-market was a legitimate form of valuation, I wouldn't even bother investing as you're basically accepting the efficient market hypothesis. Why would you buy shares of a junior miner if you thought their business was worth their market value? It wouldn't make any sense. You buy equity in a miner because you think the market is UNDERVALUING their equity - hopefully by a substantial margin which gives you a lot of upside. All of this is getting off of the main purpose of this thread, however. I'm still waiting to see if a case can be made to outlaw high frequency trading here. I haven't seen it yet.
  18. Just so we're clear here, I'm a long-term investor and tend to agree with you that something is wrong with certain transactions that take place. But I don't think you're doing a very good job at explaining what exactly is wrong. Stability, price discovery, and liquidity are not the end goals of the market (i.e. human trade.) Just because a transaction doesn't contribute to one of these doesn't mean that it's not contributing to someone's wellbeing. Derivatives can actually add a significant amount of stability if used wisely. The case of the farmer who sells forward a small portion of his crop at a period of high commodity prices is an example. The case of an airline who locks in a portion of their fuel costs at a period of low commodity prices is another example (which our own Southwest Airlines did several years back.) Someone has to take the other side of those trades in order for the benefit to occur. All accounting has some measure of fantasy in it - and your suggested mark-to-market accounting is perhaps the most fantastical of all. Let me give you an example. My own small corporation is insolvent by mark-to-market standards. If you totaled up our assets (accounts receivable, some vehicles, tools, furniture, etc.) according to what we could sell them for at auction, the market value is less than the amount of liabilities that we have (accounts payable, and some long-term debt.) According to mark-to-market, the value of my company is negative and we could legally declare bankruptcy. However, in my humble opinion, the mark-to-market accounting is wrong and my company is actually worth much more than it would appear to be on paper. There are a couple reasons for this. First, the assets we have are worth much more to us than their market value. How can that be? Well - it's quite simple. When I buy a vehicle, it loses 10-20% as soon as I drive it off the lot. I can't replace that vehicle for less than $10k but its market value is only $8k. It's even worse with tools. When I buy a cable analyzer from Fluke, it drops ~50% in market value as soon as I take it out of the box. My laptop has a market value of $500, but without it I lose ~$1000 in revenue per day. To buy a new one, I'd have to spend at least a day to load all my programs and get it functional - ~$1000 in lost revenue for that day. Another reason is earning power over time & the time value of money. My business is insolvent by mark-to-market standards. If I understand you correctly, you would have the insolvent banks (by mark-to-market standards) be shut down by regulators. I would not want my own business shut down - and I doubt our 6 other employees would want it shut down either. This insolvent business feeds 7 families! I say your mark-to-market standards can be shoved up your english arse! It is not my problem that you can't read a bank's balance sheet and understand that their assets and liabilities must be understood in the context of a functioning business that generates earnings over time and not in a snapshot. I can't understand a bank's balance sheet either. That's why I don't invest in them. But I do understand my own balance sheet, and I don't think I need to take lessons from the government on how to get back to solvency. I agree, let's get rid of the thieves. All I'm asking you for is a coherent explanation of how to identify the thief! What are the criteria that should be imposed to make a trade/transaction illegal? It sounds to me like you think the thief should just be taxed and allowed to continue operating! I agree but that has nothing to do with whether or not someone should be engaged in trading. It has everything to do with the government forcing citizens (against absolutely overwhelming public disapproval in the USA) to pay via taxes and inflation for the bailout of their buddies. And you would have more taxes put in place for trades that may be perfectly legitimate and contribute to the well-being of society. I really am having difficulty with your logic.
  19. If the object is not evil, and assuming the agent has a good intention ( if it is bad, you probably wouldn't know / couldn't prove anyway) then the action must be evaluated with respect to the circumstances involved. You need to clearly specify under what circumstances trading should not be engaged in (and why) so that social policy can accomodate. I see you have suggested limitations on futures exchange trading. Surprise, there are already limitations. How are your limitations going to be better? Then you suggested adding a small tax, as if that has no bad effects merely because it is small. I'm not exactly sure what logic has it being acceptable to confiscate money from a willing buyer and seller engaged in an otherwise morally acceptable transaction. If the transaction has a multitude of bad effects that outweigh any good effects, then fine - let the transaction be outlawed for the common good. What good is it to let the transaction (with all the bad effects) happen as long as the government can skim a few bucks off the top? You need to specify more clearly under what circumstances trading is unacceptable (and why) before many people will be convinced by your argument.
  20. I understand you're not projecting a moral system here, but you're certainly making a moral claim regarding the activity of trading. What exactly are you claiming? Is the object - the trade itself - evil? Is it the intention of certain agents that make it evil? Are the circumstances such that evil effects outweigh any good effects? You need to be more specific (on a personal level) on why you believe trading is not a good action for someone to engage in.
  21. You are making a moral claim here - that trading is not a good action for a person to engage in. However, I haven't seen much consideration of the elements of morality (e.g. the object, end, and circumstances) on the thread. And before one can consider the elements of morality, there are certain philosophical principles that are necessary to accept. I have been away from this board for a long time, but as I recall there were many here who did not care to accept the principles that make morality possible. Has there been a change here or am I wasting my time?
  22. I believe $15.9MM of the negative working capital is a liability related to warrants that will be non-cash?? I've been selling Columbus as it looks like they're having difficulty executing the buy-out. I don't want to be stuck with Columbus if the transaction doesn't go through - would rather hold SFEG here so I'm taking a little loss.
  23. Interesting thread. Charlie, you mentioned that some of the investors weren't particularly good at analyzing fundamentals. Did any of the investors achieve their wealth via technical analysis of equities or markets in general?
  24. AceofKY

    Mining Valuation Model

    1. Options/Warrants: I just calculate the exercise value; i.e. the cash that the company will receive. Then I use the fully diluted share count in per share valuations. 2. Profits: I don't calculate profit. Cash is what's important. Profits are just an accounting gimmick. My guiding principle is that a company is worth a sum of its future free cash (which could be distributed to shareholders), with the sum being discounted somewhat for risk & time preference. 3. Taxes - I call or email individual companies to get this info. It varies widely.