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BuffetJr

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  1. Hi all Thought I'd write a bit up on this company. For the record, PTS has been listed on the ASX since the dawn of time (August 1987) and hasn't really done anything (a very large understatement). However I think things are starting to get interesting and have personally taken a small shareholding in the company. Basically the way PTS operates is that it does grass roots exploration (tenement acquisition, sampling etc) and then JV its projects to interested parties...I would estimate that it currently has around 20-30 JVs at the moment. It generally then retains a interest of 10-30% in these projects with the JV partner funding the more advanced exploration, ie drilling of targets identified by PTS first pass. Unfortunately, to date no 'big ones' have even been found. However the potential is there. But what makes it more interesting than previously is that it spun off a company called Western Plains gold which has performed amazingly and is now at around $1.30...PTS retained 10 million shares as well as around 5 million oppies in WPG...so they are effectively worth around $16 million (After 20c option exercise cost). With a fully diluted market cap of only 23.5 million (thats fully diluted), there is only 7.5 million attributed to their JV interests plus their grassroots exploration assets. Obviously undervalued. And now they have released their quarterly in which they state that they have incorporated a new company called Eastern Iron which will be looking for iron in NSW. The quarterly goes on to say that subject to initial results of exploration, they will look at listing Eastern Iron...ie as they did with WPG (which went iron ore soon after). So we have a company capped at $23.5 million which has: - an investment in a listed company worth around 16 million - 20-30 joint ventures where the JV partner solely funds exploration - and possible another spinoff where you would expect like WPG they will retain a significant interest...and you would expect PTS shareholders may get priority access too Add to this quality management and in my opinion you have a company that could finally, after many years in the wilderness, put some decent runs on the board in terms of shareprice appreciation. BuffetJr
  2. BuffetJr

    Royalco (RCO.ASX) - a unique company

    Royalco (ASX.RCO) quarterly was released this afternoon...it makes for very good reading. I have copied the most important points below (with my comments in []. It is worth keeping mind when viewing these that RCO's market cap is only around $55 million. - Announcements by Kagara Zinc Limted (Mt Garnet royalty interest) and Copperco Limited (Mt Kelly royalty interest) suggest income from these two royalties will commence in 2008. [Mt Garnet was not scheduled to be returned to by Kagara until 2009. However if Kagara return to Mt Garnet in 2008, this would bring forward the royalty for royalco which is important for 2 reasons, being increased present value of the royalty, and also taking advantage of high zinc prices - which is important since the royalty is based on net smelter return.] - Royalco’s cash position remains strong ($9.0 million cash on deposit) [Ex cash assets therefore RCO's market cap is around 45 million...cash assets are expected to grow giventhe royalty from Reefton gold project] - One of Royalco’s principal tenements, Pao, has now received National Commission on Indigenous Peoples, (“NCIP”), certification. [This effectively means drilling can start immediately. Unfortunately its not possible to post the graphic from the report showing the vein sampling results, but it looks very exciting. Must be remembered that this is detailed trench sampling, not selectively chosen rock chip samples, therefore much more reliable. I would expect drill results would be available sometime in Sept/Oct. It is worth taking a look at the graphic in the quarterly report to see just how detailed the sampling has been and the fantastic results obtained over approx 2 kms---in other words, there is a very high probability they will get excellent high grade results. ] - A revised application has been lodged on the Gambang tenement to comply with recent amendments to NCIP guidelines. [This effectively means that they cannot drill yet so gambang, which is the prospect from where i took my photos - refer earlier post. So approval still required. However they will have their hands fullw ith PAO over next couple months...you would expect approval for this project in next couple months though so drilling before XMAS perhaps.] - At Malangza, rock chip sampling has commenced and will shortly be followed by systematic soil sampling. Subject to rig availability, the initial drilling campaign will be undertaken towards the end of the year. [if you remember my earlier post, this area was approved earlier this year so can be drilled. If they get a rig will be drilling by end of year as per comment. However this has been described as having the biggest potential of the projects though also most risky since fieldwork has been less than other projects. The potential size of any find (if there is any gold there) would dwarf other phillipine projects such as Indophil's] - Extensive geochemical sampling has been completed at Surigao ...an advanced porphyry copper target. ...recently identified gold anomalism on the southern side of this prospect. A review of data is proceeding with a view to selecting appropriate drill targets prior to the end of this calendar year. - Confidentiality arrangements concerning farm - in opportunities have been entered into on additional tenement packages. Due diligence is progressing in all instances. [Many tenement packages in Phillipines are sourced from mines department...but to get access to these requires excellent relationships with the departmental personnel as well as the community. Royalco has cemented these relationships.] - On that basis the Reefton gold project royalty is expected to will commence from October 1, 2007, with payment due 14 days from the end of each quarter – i.e. January 14, 2008. Based on prevailing gold prices, the royalty will generate 4,000 to 5,000 ounces of gold per annum ($A3million to $A4 million) over a project mine life of approximately 7 years. [Think about it...3-4 million pa over a 7 year period...on this royalty alone...and pretty much risk free because its gold price based not production based...if we add the Kagara and CopperCo royalty in 2008, they coud be receiving royalties of $6-7 million + per annum...I've assumed a Kagara royalty of around $2 mill though at current zinc/lead prices, it could be more than that...now not all that money can go into exploration...after all they already have 9 mill in the bank...so I'm thinking DIVIDENDS or more ROYALTY ACQUISITION bargaining power.] Also worth noting that the number of royalties in their royalty bank increased to 15...though the above three are the only certain income providers, the others are also in various stages of development/exploration. All in all a VERY positive progress report. The company based on the three royalties along should be well north of $1. Its the exploration project that provide the blue sky however. Of course they still need to find something, but with that kind of cashflow funding their exploration, in my a opinion its a matter of 'when they find something' , NOT 'if the find something'. Cheers BuffetJr
  3. BuffetJr

    Alloy Resources (ASX:AYR)

    Another nice jump today in the shareprice...now up almost 100% since the LAOS project announcement. Despite this, still capped at only around 23 million (including dilution of options which are 'just' in the money). Not a very demanding market capitalisation at all! All time high of 28c occurred on listing date, so probably more realistic to look at the all time high as being 24c though even that was only a couple weeks after listing. I have done a little bit of snooping, and believe that artisinal mining at surface has routinely graded greater than 10g/t gold...this, in conjunction with the obvious copper mineralisation in the area, is a very good sign for exploration drilling. Its unthinkable that no drilling has ever occurred on this area...obviously the locals were happy enough just taking the gold at surface. I look forward to AYR releasing their exploration timetable for this project. BuffetJr
  4. BuffetJr

    Copper Strike (ASX:CSE)

    Some fantastic additional drilling results were announced by CSE recently, however the shareprice reaction was quite mooted with only a small rise. There appears to be some willing profit takers at the moment, probably from recent capital raising at 50c. It is interesting to compare CSE with another ASX company that has performed very strongly, called Prairie downs (PDZ), also on the back of impressive zinc/lead/silver results. PDZ has a market cap fully diluted of around 80 million (it has jumped today on some more good results). However CSE has a market cap of only around $47 million. Although both companies are quite impressive, I feel CSE has many more irons in the fire and the market cap compared to its peers (incl PDZ) is ridiculously low! PDZ so far has the single promising project on which a scoping study was based on a 1 million tonne resource. Admittedly the resource will probably end up being significantly larger. However, CSE has the following: - two significant copper project at Einsleigh on which a favourable study suggested a solid financial outcome - signficant zinc/lead/silver potential at its Chloes (and satellite deposits) project...although no real resoure estimate has been released yet (currently being calculated), I estimate that the Chloes, Young and Jackson deposits alone would amount to around 2.5 to 3 million tonnes of mid grade zinc/lead/silver - Walford Creek polymetallic deposit which is probably going to be JVed to a nearby company, for which CSE will retain a significant interest in - an majority interest in a spinoff company that is soon to list with some very exciting projects that were not getting the attention they deserved in CSE due to commitments on Einsleigh and Chloes - Kamarga projet, which is a MASSIVE zinc project...though the zinc is low grade...there is a good probability though that within this resource they will be able to find high grade pods Based on the above, I continue to believe that CSE presents fantastic value, personally $2 is not out of reach over next couple years in my opinion.. I am still jicking myself at offloading majority of my shares once they had doubled (I need to revisit my trading rules I think). BuffetJr
  5. Stock I've beeh holding for a couple months now today just had a very good announcement. Prior to today, was struggling despite: - having a good cash position - having a top notch board, including Peter Harold, the Salay Malay MD, as its chairman - having a decent gold resource, that would be valuable in a rising gold price environment - excellent exploration portfolio in Australia Today though, they announced what seems a VERY attractive deal being acquisition of a project in LAOS where several Australian explorers are now operating, including of course that juggernaut Oxiana Resources. Looking at the projects location, its very close to the projects operated by PNA (Pan Australia) and RXL (Rox Resources). The difference is that AYRs project has had little exploration, despite the presence of artisinal miners at surface. Given AYRs market cap of only around 7-8 million, and its good ash position, any positive results at the LAOS project will send the shareprice rocketing in my opinion while having limited downside due to its Australian exploration/resource assets. Therefore I reckon its a very good speculative bet...thankfully i loaded up just prior to this announcement...i figured it had been too quiet and that something was coming...looks like i was right. Definitely worth a look. BuffetJr
  6. BuffetJr

    Royalco (RCO.ASX) - a unique company

    Today's announcement by RCO is excellent, and supports my recent post about the work they are doing in the Philipines. They now have exploration access to one of their 'top 3' prospect areas, PAO. The others are Gambang and Malangza (though their other areas are by no means substandard). Gambang is my favourite (since I've seen what's there)...Malagza is a conceptual play (some access already granted here) that has the potential to be, well, 'earth shattering' would be an accurate term. But must more greenfields it seems. Historic sampling at PAO as per following shows the 'potential': "Historic sampling of the Manidyo vein has recorded up to 49.42 g/t gold, 348 g/t silver and 3.94% copper in assays, whilst samples from Digyan have assayed up to 95 g/t gold, 272 g/t silver and 13.6% copper. The outcropping vein at Manidyo is approximately 10 metres wide and at Digyan the vein is approximately 4 metres wide." Of course they need to throw the lie detector down there to see if there is anything beneath. As shown by the graphic in the announcement however, the fact that these two areas are quite distinct (about 1km separate) shows the obvious mineralisation potential of the project. Unfortuantely this was not one of the project areas I visited in December (refer posts and pictures in earlier posts) so couldn't see it first hand. Though my friend has (can't shut him up about it!). Drilling should begin during July, probably towards the end or early august. If they hit something...thats when the fun really begins. BuffetJr
  7. BuffetJr

    Royalco (RCO.ASX) - a unique company

    Been a while since I've posted here. Would like to say due to being to busy, but the truth is that I've been very lazy. The good news is that the two main stocks i did post on, Royalco Resources and Copperstrike, have both performed exceptionally well with Royalco now finally double its IPO price, and Copperstrike showing a nice 200+% return. Even better is that these gains have not been acvhieved simply due to the mining boom. Copperstrike's gains have been based on very solid drill results mainly at their zinc targets. These appear to now be at resource definition stage which means they can be included in the feasibility study that was done on their copper project. Though the feasibility study was solid, the company intends to add the zinc projects to further increase the economics...the zinc projects are way above expectations and look like growting even further. Mind you, several broker reports valuing them at $1+ didn't hurt either. To top it off, CSE this week announced a spinoff company with an IPO expected in August...surprisingly the price dropped after that was announced. Royalco's gains on the other hand are more by stealth...although they are short on announcements, there is a lot of work going on behind the scenes in the Phillipines to shore up support. They have done excellent work with the community over there and both the political and social communities strongly support the work RCO (and other ASX listed companies) are doing in the phillipines. Further to that, Oceana has now commenced production at eefton, which means the gold royalty will commence shortly. The market is slowly but surely taking notice that this will shortly be an exploration company with strong cashflows...hence the steady price rise recently. I expect a lot more from the above two, though my preference is RCO for the bluesky appeal. I hold a lot more RCO than CSE. Cheers BuffetJr
  8. BuffetJr

    Royalco (RCO.ASX) - a unique company

    Royalco now up to 95c on NO news. Not much to add to my previous post except that I am perplexed by the absence of an OGD ann confirming production commencement at its Reefton project, though OGD preso on 14 March confirms first production to be 1st qtr 2007 (end of the quarter is only a few days away). Also, MD will be presenting at the Asia Mining singapore conference this week...and two stockbrokers I know (and use), will both be there pushing the Royalco story as well as their other recommendations. Approval process must be getting close to completion on their two prime exploration areas, Gambang and Pao, and I would expect a further upward rerating of the shareprice if the outcome is positive, though some of the market may think its priced in. By far the best junior mining stock in the WORLD in my opinion (I've already described my reasoning in detail in previous posts)...but being the best doesn't necessarily mean giving the best investment returns (though you never know). I'll be happy with an annual doubling of SP given the amount i hold though I can see much more that that if things go to plan. A dividend resulting from royalty cashflow in a couple years would be nice too. BuffetJr
  9. BuffetJr

    Royalco (RCO.ASX) - a unique company

    Royalco (RCO) finished just shy of its highest ever closing price on Fri, which is not a bad effort given the smack (unjustifiable) the ASX resources sector took over the week. Here is a post I Did on another forum few days ago re royalco: i'm liking the shareprice action in RCO currently...i thought it might drop a little from people getting impatient with confirmation of gold production at OGD's reefton proejct (from which RCO will get an annual royalty worth round $4 million), but despite the delay, the RCO shareprice has held up well. A couple significant (i wouldn't say large) sellers have been soaked up by eager buyers (including myself), eager because its damn hard to get this stock in decent quantities given how tightly it is held. Given the bounceback in the gold price, the royalty is now ever more valuable, and i would expect some decent shareprice appreciation after it commences, remembering that the royalty will last at least 7 years. Given an exploration spend of around 2 million per year, you could expect that RCO will pay dividends after a couple years. And remember this royalty is production risk free since its gold price based, not production based. So unless gold price collapses completely, the cashflow will not be effected significantly and of course if gold price goes up, they benefit significantly. Add the royalty cashflow from the other two projects, Kagara's Mt Garnet, and Copperco's project and we have an 'explorer' with a PE of around 7-8 at current shareprice. And then theres the massive upside from their phillipines exploration projects...i've been there, seen what they have first hand (see pictures above). Their exploration will find copper/gold (heck theres already a deposit on the ground), the market will rerate it, then its a matter of furter drilling to see if its in quantity, and then another rerating. Should be a core stock in every junior mining/explorer portfolio in my opinion. The MD recently was interviewed on a particular show on Bloomberg TV, and was the first ever junior aussie miner to be featuered on this show. I've been told the file will eventually be placed on the Royalco website once they can condense it into a downloadable size. Well worth a listen. And here is a snippet from a stockbroker about RCO, release couple days ago (table and graph not included): RCO's share price is now up 50% since listing due to anticipation of signficant royalties from OGD's Reefton gold project commencing around July/August 2007 after a 6-month grade period. OGD reports that 30,000 tonnes of ore had been stockpiled for processing in the first quarter of 2007. As can be seen from the chart below RCO's total cashflows are quite sensitive to gold prices because of a accelerator component between NZ$700/oz and NZ$900/oz. This mean RCO actually receives more physical ounces with a rising gold prices within this price band as well as more for each ounce. Assuming current spot commodities RCO should be able to sustain a well funded exploration programme for several years and build a signficant cash position at the same time. Total cashflows at current commodity prices and current cash in the bank is rough equivalent to RCO's current market capitalisation. Discounting cashflows at 5% plus cash in bank gives a valuation of 69cps at spot commodities or 58cps using our current assumptions. We await news on the company's Philippine exploration activities. Unfortunately, my other stock I posted on here, Copperstrike, is not faring nearly as well. Though I did flag that there would be weakness after the feasibility, I didn't expect this much downside...but the resource sector slump exacerbated it. There is no justification for the collapse in CSE since the feasibility although ordinary in results, did NOT take into account the significant zinc project. The shareprice is now in ridiculously low bargain territory, and i will be buying back the ones i sold in the 40s/50s next week. BuffetJr
  10. Hi Dr From an aussie point of view, the junior goldies (explorers and producers alike) are struggling due to very poor production performances from teh majority of gold producers over the last couple quarters... Companies like BMO (gone to the wall) and GLN which is producing at costs close to or above the gold price, and various other goldies are struggling and this is feeding through to the rest of the sector. One of my lil companies, Atlantic Gold (ATV) has moved up a little but is well under where it should be imo given its nice resource in Canada. Do not hold many goldies in my portfolio at the moment as there appears no sign of the Aussie producers improving their performance however if they get much cheaper , then the ones with a quality resource and management may just be on my value radar. BuffetJr
  11. BuffetJr

    Copper Strike (ASX:CSE)

    CSE has sufferred a correction since i last posted, particularly yesterday. I expect this is due to concern over the feasibility that will be released shortly. Admittedly, the feasibility is likely to be weak particularly given the drop in base metal prices...however what the market has not factored in is that the feasibility will be based solely on the Einsleigh/Kaiser Bill copper project... The reality is that CSE has found a heap of zinc at Chloes, which is right next to kaiser bill and einsleigh, and so any development will likely include chloes which will MASSIVELY impact the cashflow of the project. I will be waiting for the fesibility then hoping for some further weakness after which i will be buying back the shares i sold in the 40s-50s. Following which, CSE will be aggressively drilling at both kaiser, einsleigh and chloes to find more resources (and they will find more)...and also likely to jv Walford Creek at anytime after the feasibility is released. The SP will then recover lost ground and probably make new highs IMO...i expect all this around a 5-6 month time frame. BuffetJr
  12. Hi Dr I would reccomend my broker, but not the firm itself (if that makes any sense). More than happy to take emails from people who are interested. BuffetJr
  13. BuffetJr

    Royalco (RCO.ASX) - a unique company

    RCO now up to 73c...on small volume though still... Would expect there has been some very good progress on getting approvals on Gambang/Pao...so hopefully they are imminent...this would allow them to jump into exploratio nin their best areas. OGD ann re confirmation of production commencement cant be far away and RCO would co-announce that i would expect. However, given how many gold producers on ASX are getting carted at the moment 9due to their pathetic perforamnce over the last coupoe quarter in terms of costs and production volumes), not sure this will have a major impact on shareprice... But its going up at the moment, thats the main thing. I personally picked up a few more at 71c today. BuffetJr
  14. Hi Tom I agree with the Doc regarding getting a good broker. Re Commissions, i used to use an online broker with very cheap rates. My broker has about 6 times the rate, but i find that he is able to time my entries better (since he is watching the screen) and often the savings there more than offset the higher brokerage rate. And if you are going to play junior miners...you need a broker that: - has main focus on that sector, and has been for a while (5+ years at least imo) - does not recommend house stocks (unless they actually are good) - is versatile and can look at other sectors (for example, jnr sector in Australia is full of cr@p at the moment and is stagnating, with some junior goldies going to the wall...so need to be able to think outside just the mining sector) I would strongly recommend my broker but he is in Australia and only plays the Aussie sharemarket. Regarding funds, I find the listed ones are the best, rather than going towardsa 'real' investment manager. Companies (on the ASX) like Heemskirk, Lion Selection Group and so forth have all done quite well. Don't invest in them myself though i did have Lion Selection for a while many years ago. Regarding playing the junior market, if your a trader, then i cant comment...but if your an investor, see my detailed post above. Its all about research. BuffetJr
  15. BuffetJr

    Royalco (RCO.ASX) - a unique company

    Hi Frizz CSE, another company i posted on previously, has recently options a tungsten project to Paradigm (PDM). PDM subsequently went for a run, because the tungsten project is a very good one...CSE offloaded it though because they are focussed on their copper/zinc/lead play at Einsleigh, which is much more value adding (though with exposure to PDM through shares). Another tungsten company is Vital metals, but i personally wouldnt touch it...being run by Bill Ryan who although a nice enough bloke, really didnt do a good job with Titan when he was at the helm of that company. The tungsten project is quite good, and i would probably take another look at it if someone else was appointed to head the company. GIP havent really looked at it...geo mate of mine used to like it, but has completely changed his view and now wouldnt touch it. The fact taht its Egypt is enough for me...and even if i didnt mind Egypt, i would lean towards Centamin (CNT) instead of GIP. BuffetJr
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