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CEO.CA members discuss high-risk penny stocks which can lose their entire value. Only risk what you can afford to lose.
@Excelsior Thanks @EvenPrime and @FundamentalAnalysis for the great conversations in here. Yes that #permitting rant and research process got me reviewing $SBB again. It dawned on me after reading over their press releases they never got their update or decision by the end of 2016. This round there is much more support from the stakeholders and communities involved and they've done a great deal of outreach about the measures being taken to safeguard the environment if they get the green light.
It's a great project, with a great team, and it's very likely it will finally move forward in 2017.... so I decided to get back in the water. Yes, a very profitable transaction, that would not have happened if it wasn't for the great folks chatting here in #mbgtrends. Ever Upward!
@FundamentalAnalysisIf you want a distressed play, in my opinion $PHZ.F Petropavlovsk is one of the safest around I think. It has a large level of debt, and its projects are based in Russia. Large reserve/resource base. Including a plan to process the large refractory reserves that have been stockpiled. It has low AISC, and there has been a lot of positive catalysts including restructuring of debts etc..... Personally that is one I'm invested in as I have more hope for that (given that its an established past producer which had a market cap multiple times time it is today back in 2011. (Think it was 10 times higher if I have figures correct).
@FundamentalAnalysisI've looked into $BAA.TO and this is a company which is financially very burdened, high debts, royalties, uneconomic streams on projects, management who went severely over budget when building the operation, and if you look at the numbers they are struggling to make money and sort out their operations. The lack of management incentives is also concerning, they simply don't have a stake in the company. If the valuation is so low, why haven't the management bought a significant stake in the company, its because they don't believe in it IMO. I've been looking at $BAA and also $PRU closely and you may be able to make a quick buck, but there are so many issues with the companies. People should tread carefully, often when something is trading at a low valuation compared to its peers, its usually because there is something seriously wrong with it. $PRU is still behind schedule and burning through the cash they had (it was financially strong with worrying operations, and its becoming very quickly financiall weaker), and $BAA is not making any progress either but that is both financially weak and operationally weak. There is a possibility they could be dead ducks, and simply shareholder destructive, via future share issuances etc.... If gold prices move up these companies will go up, but then you might as well bet on an optionality play.
@FundamentalAnalysis@MiningBookGuy I'm sure they're will be another opportunity, when gold price gets smashed again. I'm not convinced of the recent rally, but hey ho if it is real, I'm not gonna complain.
@MiningBookGuy@FundamentalAnalysis - I think some of these gold #development projects would have been immediately acquired if gold was smashed a little further over the last 3 weeks, rather than bouncing. I am always curious if acquisitions take place during a bear run or a bull run.
$KAM and $TGM tremendously benefited from the Q1 2016 bull-run, and got an 'extra' premium. But others (like Volta and Ampella in Q4 2013) got a huge premium AFTER getting hammered, literally bought at the seasonal bottom.
Just a few examples...for $SBB, this isn't the best parallel to either of these possibilities. But I think it's worth thinking about where the momentum is, and what previous #takeouts or #acquisitions we can compare to
@FundamentalAnalysis@Excelsior Not followed it closely, but had it on my watchlist as something with a lot of potential. I've made a note which says $350million combined NPV and high inside ownership. Do you have any thoughts. Not sure what Put me off first time round....
@Excelsior@FundamentalAnalysis - I just have a small position in $RCG but wanted to add more when I saw that they were getting close to production (which was supposed to start in Jan or Feb 2017). There just has been radio silence, but I haven't been on all the stock boards looking for word through the grapevine.
They have 4 prior producing mines, and some of them are small, but there appears to a be quite a bit of exploration upside available around these deposits.
It was nice to see Eric #Sprott throw his name in the hat as a stakeholder, and something tells me he & his team did their due diligence before taking the plunge.
It's just languished a bit for the last month or so, but I'm curious to see what happens when they announce they are officially in production. Many investors are still waiting on the sidelines until they cross that milestone, but I'd rather position stronger before it becomes more obvious and de-risked.
@FundamentalAnalysis@Excelsior Good points. Its similar to how he talks about $GOLD and the ounces in the ground story as its a clever way to convince the unsuspecting retail investor and probably a few institutional investors too (lots of big dumb money around). Nothing wrong with holding $GOLD or $UEC because along with future money trends they will talk up the stock very very well so its about going along for that ride.
@ExcelsiorAgreed @FundamentalAnalysis - I'm ready for that "optionality" promo ride for sure. However, I like owning the spectrum of current #Producers (that will get to renegotiate their longer term off-take agreements over the next few years), #Developers, and #Explorers.
At this point in the cycle, every single #Uranium company out there from Cameco and Areva on down are all "optionality" plays as they ALL need higher Uranium prices to be profitable longer term.
@FundamentalAnalysis@Excelsior Its highly worrying that companies like Future money trends and certain newsletter writers have a tremondous amount of power in moving prices substantially. Surely there has to be some regulation on that, its practically market manipulation. The newsletter writer or the promo guys knows exactly what will happen based on his/her news release so can front run the whole thing.
@FundamentalAnalysisMy only issue, and maybe someone can explain is the 30% ownership. It seems Lydia may acquire the 30%, would a major want the 30%? If the resource base is substantial enough then perhaps some form of a JV could be possible. If the asset does increase substantially so that it becomes effectively strategic, would erdogan want to get his hands on it??....How competent are Lydia with minebuilding?
@Onlyflaws@FundamentalAnalysis Lydia is experienced mine builder. They are also the reason why the risk to invest in Mariana is substantially lower than with a junior without local partner. If a major would be interested, my guess is buying Mariana out and then buying 20% from Lydia. Whatever the result, this will be a mine and shareholders of Mariana should have good profits. Im going to hold until the PFS, if theyre not bought out before, because I think thats where the real suprise will come from.
@FundamentalAnalysis@onlyflaws Any idea what the economics are at $1000 gold, $2.25 copper and say $1/lb zinc. Also could anyone comment on the recovery assumptions they have used? Based on the inferred zinc zone, looks like if it can be proven up then it will pay for the CAPEX practically.
@Onlyflaws@FundamentalAnalysis There wasnt sensitivity economics for the project in the PEA. Because of the high grades this project will be very economical also with POG at 1000$. Im guessing the PFS later will have all these things considered. I was actually worried about the recovery aspects as the PEA was delayed quite a bit. 80-90% recovery rates sound good to me, but please, some metallurgy expert could chime in.
@FundamentalAnalysisI did a quick back of the envelope calculation based on the UK market price which is £100mn (160m CAD). Based on the PEA 30% of $1.37bn USD = $411mn USD. If we deduct 20% of the $411mn USD (assuming more conservative gold/copper prices then that shown). We come to $328.8mn USD. Lets say recoveries are a bit worse then what is projected 10% worse we now have 0.9*328.8mn = $295.92mn. Lets add in some initial cost overruns. Current initial CAPEX is only $169mn lets call it $200mn. So thats (295.92mn - 31mn (extra initial capex) = $264.95. Lets add in another 20% discount for being in Turkey as well as holding a minority interest. $211mn. That is in UK pound terms at a more conservative stronger sterling versus dollar rates from 1.23 today to say 1.4 $211mn/1.4 = £151mn. The market price of the shares if all options/warrants are exercised and assuming no proceeds (which is again more conservative then expected) makes the effective market cap £125million (circa 25% more shares issued). Company also has £5mn of cash in the bank at 30/9/16. Lets assume that is zero. so we have an ultra conversative ignoring the zinc zone, other projects held by mariana, and no further exploration value add a 151/125 = 20.8% upside.
@MiningBookGuy@anonymous - what are you talking about? this $MARL board seems fine to me. I'm scrolling up and I see @FundamentalAnalysis@Onlyflaws@LucTenHave as some of the recent posters. These are all respected posters at CEO.CA. Plenty of positive talk...but it's based on positive news.
Overall, this is FAR better than many other CEO.CA rooms, and the MARL board at LSE is generally filled with far more spam (though to be fair I haven't followed it in a while). Please clarify if you're having issues with a few specific posts (am I missing something?). It would also help if you got a name/handle here.
In fact, I'll go check the LSE board right now to see if I can figure some of this out...
@FundamentalAnalysis@anonymous Not sure who specifically you were referring to. I personally don't post on any other message board. Yes sometimes comments which are obvious to those who are more experienced or have followed a story are repeated over and over and it maybe fustrating to see again. For new readers however it is useful to see a refresher with some additional comments rather then trawling through months and months of messages. As far as I'm aware CEO.CA as a whole isn't catered for invitation only elite established experienced mining professionals who are also savvy investors where only the best mining engineers, geologists and financiers can comment. I'm sure there are private rooms that could be set up on ceo.ca for that, if you think there is noise which you wish to cut out.
@FundamentalAnalysisThere was an interview recently with Steve St Angelo. He mentioned something interesting about Gold/Silver. He said the market price of gold/silver won't be allowed to go below the cost of production, otherwise traders would start taking delivery (which has its own limitations given the availability of physical held by LME/Comex etc...) and they would sell it into the actual physical markets for a premium.... Today we have gold/silver prices around/slightly above the cost of production... I don't quite understand the logic on how what he says makes much sense but is anyone able to comment? Here is the video in more detail from 21:00 onwards. https://www.youtube.com/watch?v=g9WnUtlEDqg+
@MiningBookGuy@FundamentalAnalysis - will try to listen to that section of the video soon. I'm behind on #mbgtrends conversation, need to catch up on a few older posts first.
BTW, i'm usually less active here when i'm buying/selling/researching juniors...sooo much activity right now, so it's tough to keep up with everything at ceo.ca!
@FundamentalAnalysisOn a seperate note is anyone able to provide some incite on how flatreef $IVN compares with Waterberg $PTM. Waterberg's economics in my opinion are actually quite disappointing, and I'm wondering if similar is expected with $IVN.
@FundamentalAnalysis@Excelsior Thanks, I was trying to understand why the cash costs for both are so low (by product benefits), yet overall the economics are actually quite poor with Low IRR's. High CAPEX etc.. Neither seem like really low costs mines. Unless I'm missing something high quality PGM mines don't seem to exist compared to gold or copper mines.
@Excelsior@FundamentalAnalysis - I believe that due to their size and scope it takes a toll on the IRR % and yes they have large Capex requirements, but they are both world class assets and very mineral rich deposits. You are correct that we see #Gold projects with much better economics, but Gold is much more pricey relative to other commodities (in particular the #PGMs than it is historically). There also is a scarcity of productive PGM deposits or mines in development, which will underpin pricing. Also, many of the older mines are deep, labor intensive, and complicated by S. Africa Union BS. The mechanized mining both $PTM and $IVN plan to deploy alleviates some of those concerns, and they won't be so deep either.
My thesis is that #Platinum has a lot of ground to make up to revert to it's mean with #Gold, and #Palladium acts much like #Silver does in relation to #Gold (outperformance to the upside and down by #MiniMehttps://sidoxia.files.wordpress.com/2009/07/minime.jpg+ ).
I believe the #PGM sector including #Rhodium is going much much higher over the next few years, and that will tweak those returns in a very positive direction.
Right now, people are treating it like Platinum, Palladium, and Rhodium prices will always be trading this low. Platinum and Palladium pricing won't stay this low during this next bull cycle, and it will surprise people with #Gold#TunnelVision over the next few years. There aren't a thousand PGM companies either, but there are plenty and plenty of Gold & Copper companies.
@FundamentalAnalysis@Excelsior Thanks for your input. Ivanhoe is my only current exposure, but $PTM if the management can sort themselves out could be a very very interesting play. I need to analyse this space more carefully including the large producers to see where we stand. Platinum/palladium should be an easy market to analyse compared to gold as most of it comes from south africa, russia, zimbabwe
@FundamentalAnalysis@MiningBookGuy That's the one, I saw it in a bookshop. At the time ended up reading the new case for gold whilst at the bookshop. The war on gold however just going by the title is something I am very keen on reading. Its quite an old book, and that's what I like about it, it could potentially give a more accurate insight into what gold means politically.
@BS@FundamentalAnalysis$PTM Waterberg will likely have a 30+ year mine life (based on drilling to date), and probably lowest quartile for costs. That's the type of mine that doesn't care about cycles, it will keep making a good profit during bad periods too. IRR may be lower than for some <8 year, high grade gold deposit, but in the long run, this kind of mine will pay for itself over and over again. If it wouldn't have potential, the Japanese wouldn't have acquired such a large stake in the project. Same is true for $IVN's Platreef (and Kamoa).
@FundamentalAnalysis@highheat I'm with @Goldfinger on this. Their is a strong negative correlation between real interest rates and gold prices. It's the single largest factor. Manipulating occurs around the gold price but doesn't explain the longer term trend.
@FundamentalAnalysisThanks @Excelsior it's the main issue I have with the PGM space, along with the threat of how quickly electrics cars could disrupt the space versus fuel cell vehicles. Bottom line however is the earth adds around 75million people a year, most of that from emerging/frontier markets who want a better standard of living, and its not like the west as it stands are giving up their vehicles. So more in absolute terms is needed. I think we need faster supply destruction in south africa, the longer it drags out the riskier the PGM space becomes as a speculation. But hey what do I know.....met coal made a rampant rise last year which noone foresaw, maybe south african govt threatens to stop all exports.
@FundamentalAnalysisTo me this is proof that there is a clear lack of good quality precious metals projects worth financing. I did suggest whether the team would consider looking at base metal projects whilst the prices were low, and they mentioned it wasn't there strategy and they would find value adding innovative ways of continuing to participate in the precious metals space if valuations got frothy. Just shows there is very little around now, we could end up with gold production declining in the years to come, if prices stay where they are. The Uranium move and the share buyback move although small the former was unprecedented to me. $SSL