Sept 11 - Gold was indeed breaking out over $1000, and has now established that area as support. At the moment it certainly looks like a classic bull market, so buy the dips is in order. That said, it has had a run, could pull back and consolidate for a bit, which could be a time to buy some gold stocks. (or gold)
I mentioned VEN-T Ventana Gold as a good momentum play which I have been in and out of. It was at about 5.80 then and is over $10 now on more good results. They just raised a ton of money at this price... I think it will go higher still but play with caution, sell half if you get close to a double.
The other juniors I mention I was holding I still am...
LMA-t was 1.45, I sold half at 1.99 and hold half at 1.89
FVI-v was 1.40, holding at 1.58
MMM-t was 1.11, I sold some at 1.13-1.19, and hold most at 1.20
But whichever ones you know and are comfortable with should do well in this environment.
Sept 13 - Cobalt and Lithium
Hot topics... many momentum plays, but I have these 2 'safer' buy and hold ones:
GMC - was 62, now 68 - patience needed
TNR - was 29, now 32 - will spin out Intl Lithium soon which could help spec appeal
Sept 23
AAB.t - was 33 and now 35... safest one of those I mention so far...
Sept 30
GRG.v - was .285 and now .29... C'mon Joe!
Sunday, October 18, 2009
Wednesday, September 30, 2009
Was Joe invited to the party?
There is an interesting news release out today for a major gold company I used to own. Here's the beginning of it:
"YAMANA GOLD INC. (TSX: YRI; NYSE: AUY; LSE: YAU) today held the official inauguration ceremony for its Gualcamayo gold mine, coinciding with the completion of its first quarter of commercial production. Gualcamayo is a significant operation for Yamana in Argentina where the Company's interests include a 12.5% interest in the Alumbrera mine and several development or near development projects including Agua Rica.
Working in collaboration with both the community and appropriate governing authorities, Yamana was able to develop the Gualcamayo mine quickly. Construction of the Gualcamayo mine was substantially completed in less than 20 months following receipt of a positive feasibility study and the start of construction in August 2007. The processing of ore at Gualcamayo began in late December 2008 and Yamana declared commercial production on July 1, 2009. "
It goes on to say that the president of the country, the governor of the state, and many other dignitaries were there. But I wonder if Joe was invited? Certainly Yamana is a major player, it has an $8.5 billion market cap. But the thing that I was looking for was not mentioned... and that is that Joe's little company has a 1% Net Smelter Royalty (NSR) on this mine... and that means it gets 1% of the revenue of what is smelted for no cost. Might not sound like a lot, but it is a pure cash payment for no cost or work... and an asset that can be sold for a chunk of cash.
The company is GRG-V Golden Arrow Resources, last traded today at 28.5 cents, and has a market cap of $8.5 million, or 1/1000 the size of Yamana. What is the 1% NSR worth? Well it depends on the price of gold and the production, but it is estimated to be at least double the current value of the company. Furthermore, Joe Grosso and his team have been in Argentina and area since 1993 and now have about 40 properties to work on, one of which is right next to the new Yamana mine.
So GRG is a gold explorer with an asset worth more than it's market cap which provides a quarterly income, some cash in the bank, and a large inventory of prospective properties to drill on. As well as loads of connections on the continent.
So I am not sure if Joe was invited to the party to hobnob with Presidente Cristina Fernandez de Kirchner, but I for one think he should have been...
"YAMANA GOLD INC. (TSX: YRI; NYSE: AUY; LSE: YAU) today held the official inauguration ceremony for its Gualcamayo gold mine, coinciding with the completion of its first quarter of commercial production. Gualcamayo is a significant operation for Yamana in Argentina where the Company's interests include a 12.5% interest in the Alumbrera mine and several development or near development projects including Agua Rica.
Working in collaboration with both the community and appropriate governing authorities, Yamana was able to develop the Gualcamayo mine quickly. Construction of the Gualcamayo mine was substantially completed in less than 20 months following receipt of a positive feasibility study and the start of construction in August 2007. The processing of ore at Gualcamayo began in late December 2008 and Yamana declared commercial production on July 1, 2009. "
It goes on to say that the president of the country, the governor of the state, and many other dignitaries were there. But I wonder if Joe was invited? Certainly Yamana is a major player, it has an $8.5 billion market cap. But the thing that I was looking for was not mentioned... and that is that Joe's little company has a 1% Net Smelter Royalty (NSR) on this mine... and that means it gets 1% of the revenue of what is smelted for no cost. Might not sound like a lot, but it is a pure cash payment for no cost or work... and an asset that can be sold for a chunk of cash.
The company is GRG-V Golden Arrow Resources, last traded today at 28.5 cents, and has a market cap of $8.5 million, or 1/1000 the size of Yamana. What is the 1% NSR worth? Well it depends on the price of gold and the production, but it is estimated to be at least double the current value of the company. Furthermore, Joe Grosso and his team have been in Argentina and area since 1993 and now have about 40 properties to work on, one of which is right next to the new Yamana mine.
So GRG is a gold explorer with an asset worth more than it's market cap which provides a quarterly income, some cash in the bank, and a large inventory of prospective properties to drill on. As well as loads of connections on the continent.
So I am not sure if Joe was invited to the party to hobnob with Presidente Cristina Fernandez de Kirchner, but I for one think he should have been...
Wednesday, September 23, 2009
How to buy a mini hedge fund on sale
Hedge funds were designed for the rich... or at least for the Harvard MBAs who wanted to get rich on 20% incentive fees. Now they rarely actually hedge very fully but the name seems to have stuck. Usually with a minimum purchase of 50-100K for accredited investors they are not very accessible to most people.
But many closed end funds are available for purchase by anyone on the open market, and some are run in similar ways. They have the resources and contacts to get in on various deals that are not available to most investors. The ones I am interested in are investing in higher risk junior resource companies, and they tend to trade at a discount to their NAV.
Some examples:
AAB-T Aberdeen International
LV-T Longview Capital
PNP-T Pinetree Capital
TRT-V TriNorth Capital
I own small amounts of 3 of these, but the one I like the most now is AAB. It closed today at 33 cents and at June 30th had an NAV of 1.02. And it is most likely 10% or more higher that that now. Why the deep discount? Well they all tend to trade like that, but this is deeper. It may be as maybe 30-40% of the NAV is tied up in the estimated NPR (net present value) of an NSR (net smelter royalty) on an Au and U238 (gold and uranium) mine in South Africa, whose owners S&J (Simmers and Jack) have a checkered past (and many more acronyms). They had lent them $10m and when they didn't pay during the credit crisis AAB sued them to convert it to a potentially much more valuable NSR and won. But it depends of course if the mine is developed and all goes well. Currently there is insider trading scandal and director resignations (at S&J not AAB).
But more than half is invested in junior publicly traded junior resource companies, many or most of which are purchased in financing deals with added warrants. They have a value than can be easily computed on a daily basis if one were so inclined. I am not.
Keep in mind that even at this discount there is risk. This traded down from $1 in 2007 to a low of 8 cents in the 2008 crash. So not exactly your grandma's mutual fund.
So if you are looking to buy into junior resource area, but want some diversity, good management with inside connections, easy and cheap entry and exit, and a nice fat discount to boot, then I think this a great vehicle to do so. Sometimes I wonder why I follow so many when I could just buy this...
Oh yeah, it's fun.
But many closed end funds are available for purchase by anyone on the open market, and some are run in similar ways. They have the resources and contacts to get in on various deals that are not available to most investors. The ones I am interested in are investing in higher risk junior resource companies, and they tend to trade at a discount to their NAV.
Some examples:
AAB-T Aberdeen International
LV-T Longview Capital
PNP-T Pinetree Capital
TRT-V TriNorth Capital
I own small amounts of 3 of these, but the one I like the most now is AAB. It closed today at 33 cents and at June 30th had an NAV of 1.02. And it is most likely 10% or more higher that that now. Why the deep discount? Well they all tend to trade like that, but this is deeper. It may be as maybe 30-40% of the NAV is tied up in the estimated NPR (net present value) of an NSR (net smelter royalty) on an Au and U238 (gold and uranium) mine in South Africa, whose owners S&J (Simmers and Jack) have a checkered past (and many more acronyms). They had lent them $10m and when they didn't pay during the credit crisis AAB sued them to convert it to a potentially much more valuable NSR and won. But it depends of course if the mine is developed and all goes well. Currently there is insider trading scandal and director resignations (at S&J not AAB).
But more than half is invested in junior publicly traded junior resource companies, many or most of which are purchased in financing deals with added warrants. They have a value than can be easily computed on a daily basis if one were so inclined. I am not.
Keep in mind that even at this discount there is risk. This traded down from $1 in 2007 to a low of 8 cents in the 2008 crash. So not exactly your grandma's mutual fund.
So if you are looking to buy into junior resource area, but want some diversity, good management with inside connections, easy and cheap entry and exit, and a nice fat discount to boot, then I think this a great vehicle to do so. Sometimes I wonder why I follow so many when I could just buy this...
Oh yeah, it's fun.
Sunday, September 13, 2009
The new alchemy... turning cobalt into lithium
With the cooler September nights the summer lithium frenzy seems to be cooling as well. Junior miners would stake claims in moose pasture that had a discarded lithium battery to give their stock a boost. And in general it worked, for a while...
For those who are new to this, lithium is used in the new generation of batteries that are used in the new generation of battery powered cars. And in the shadow of a more sustained bull market in rare earth element minerals (REEs) they caught fire, with some stocks multiplying quickly. The one I bought was TNR Gold (TNR-V) which did double from mid-July to mid-Aug and then pulled back, but in a more sober way. It closed Friday at 29 cents, has great gold properties and I'd be a buyer in the mid to high 20's if I didnt already have some. In addition to their gold properties in Argentina, they managed to accumulate a bunch of lithium related properties over the years which are suddenly popular. So much so that they plan to spin them out this fall into a new company which I think will be called International Lithium. I think TNR is a good speculation without the lithium, but the spin off could catch fire. Or not... but this looks to be one of the better values in the junior lithium exploration space.
But the related value play I really like is Geovic Mining (GMC-T). It closed Friday at 62 cents, and has over 50 cents in cash and a 60% interest in a series of cobalt claims in Cameroon. Traded up around and over $4 just 2 years ago and has been given up for dead. But cash can keep you alive long enough for things to change. And it happens that cobalt is also used in these car batteries along with lithium. Much current and future cobalt supply comes from the 'Democratic' Republic of Congo. All in all, Cameroon is very stable in comparison. Of course so is plutonium.
But all in all, for a patient speculation GMC at 60 cents is a good one, since it trades about cash value and has by all account great properties if cobalt returns to its glory days... and I expect it may. They hope to finance their new mine 80/20 debt/equity, and hope to reduce capital costs that had ballooned and made the economics less compelling.
I added some recently at .65, and also there are 2 tradable warrants at a few cents each that expire in 2012 if you really want to roll the dice. But patience may be required.
For those who are new to this, lithium is used in the new generation of batteries that are used in the new generation of battery powered cars. And in the shadow of a more sustained bull market in rare earth element minerals (REEs) they caught fire, with some stocks multiplying quickly. The one I bought was TNR Gold (TNR-V) which did double from mid-July to mid-Aug and then pulled back, but in a more sober way. It closed Friday at 29 cents, has great gold properties and I'd be a buyer in the mid to high 20's if I didnt already have some. In addition to their gold properties in Argentina, they managed to accumulate a bunch of lithium related properties over the years which are suddenly popular. So much so that they plan to spin them out this fall into a new company which I think will be called International Lithium. I think TNR is a good speculation without the lithium, but the spin off could catch fire. Or not... but this looks to be one of the better values in the junior lithium exploration space.
But the related value play I really like is Geovic Mining (GMC-T). It closed Friday at 62 cents, and has over 50 cents in cash and a 60% interest in a series of cobalt claims in Cameroon. Traded up around and over $4 just 2 years ago and has been given up for dead. But cash can keep you alive long enough for things to change. And it happens that cobalt is also used in these car batteries along with lithium. Much current and future cobalt supply comes from the 'Democratic' Republic of Congo. All in all, Cameroon is very stable in comparison. Of course so is plutonium.
But all in all, for a patient speculation GMC at 60 cents is a good one, since it trades about cash value and has by all account great properties if cobalt returns to its glory days... and I expect it may. They hope to finance their new mine 80/20 debt/equity, and hope to reduce capital costs that had ballooned and made the economics less compelling.
I added some recently at .65, and also there are 2 tradable warrants at a few cents each that expire in 2012 if you really want to roll the dice. But patience may be required.
Friday, September 11, 2009
Gold - the long awaited $1,000 breakout!
Okay I've been a gold bug for many years, both to my benefit and detriment... I try to treat it in a more detached way, but there's just something about it...
So all bias aside, the chart does look like it is breaking out. Check out the weekly chart... it is the 3rd attempt at $1,000 since early 2008, all MAs are moving up , it is not overbought on RSI, and best of all it looks like a long cup and handle formation which is one of the most reliable. A year after the crash, a long awaited breakout may be happening now.
But it is hard to find many stocks that haven't already moved up lately. Not to say they won't continue but I prefer bargains... The only one I bought this week was VEN-T Ventana Gold, who seem to have found a potential elephant in Colombia. It has already had a great run from a 52 week low of 4 cents to today's close of 5.80... yes quite an amazing move... I bought at 5.52 after they had more impressive results, but mainly as the chart has been consolidating in the $5-6 area and looks like it is ready for it's next move. But I am playing this as a momentum play, and have put in a tight stop at 5.29, so quite likely I will get tossed out unless this is the breakout. If so I will step back and monitor.
There are many good gold/silver juniors, some I own include LMA-T, MMM-T, FVI-V... am holding but not buying as they are up a fair bit lately. Once gold breaks $1000 and stays there (like maybe next week...) all gold stocks can be good things to hold onto.
For less risk you can buy bullion or an EFT that tracks it... or HGU-T which attempts to doubles it's move up.
So all bias aside, the chart does look like it is breaking out. Check out the weekly chart... it is the 3rd attempt at $1,000 since early 2008, all MAs are moving up , it is not overbought on RSI, and best of all it looks like a long cup and handle formation which is one of the most reliable. A year after the crash, a long awaited breakout may be happening now.
But it is hard to find many stocks that haven't already moved up lately. Not to say they won't continue but I prefer bargains... The only one I bought this week was VEN-T Ventana Gold, who seem to have found a potential elephant in Colombia. It has already had a great run from a 52 week low of 4 cents to today's close of 5.80... yes quite an amazing move... I bought at 5.52 after they had more impressive results, but mainly as the chart has been consolidating in the $5-6 area and looks like it is ready for it's next move. But I am playing this as a momentum play, and have put in a tight stop at 5.29, so quite likely I will get tossed out unless this is the breakout. If so I will step back and monitor.
There are many good gold/silver juniors, some I own include LMA-T, MMM-T, FVI-V... am holding but not buying as they are up a fair bit lately. Once gold breaks $1000 and stays there (like maybe next week...) all gold stocks can be good things to hold onto.
For less risk you can buy bullion or an EFT that tracks it... or HGU-T which attempts to doubles it's move up.
Monday, August 17, 2009
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