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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.
@MiningBookGuy@Brendan - in that case, the average person should be in something like $SII$FNV ...honestly, juniors aren't supposed to be for 'average people'. But if we're talking 'average CEO.CA user/speculator', I DO think anyone who is serious about this needs to get in the habit of selling "when they can". @stateside's "sell half on a double" is a BETTER rule than "hold everything through the cycle", IMO, even if the latter ultimately is better for the pocketbook...because it's just too hard psychologically.
BTW, nobody take this as gospel. i'm literally coming up with this out of nowhere! but it really is an interesting topic.. #SellHalfOnADouble#HoldThroughTheCycle#mbgtrends#newbies (will come back to this eventually thanks to tags!)
@FundamentalAnalysisIf $SII can close this most recent deal, that should provide them with an even greater amount of sustainable long term income. Storing bullion and earning a small amount of fees from it is an absolutely brilliant business. Bullion holders are for the most part insensitive to the changes in the price. I hope this deal goes through, they made an offer whilst the trust was at a significant discount to NAV and already have a good precious metals storage business, which although still only a small portion of overall profits (as margins are small)....it is a very sustainable business model bar any bizarre legislation changes. #mbgtrends#newbies
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@FundamentalAnalysisSensible thoughts all round. As a longer term story backed by good fundamentals I will maintain by long term bull position on $SII. (Full disclosure I've parked a lot of excess non speculative capital into this company at around 1.95CAD average price so below current price..but haven't sold any position and will not consider it until at least 4+CAD or if something goes horribly wrong). This is a high quality business, which after taking out the working capital (i.e "investable capital" or "dividend payout capital")....the business itself has a cheap valuation and will only get stronger benefiting from the upside in commodities whilst also taking advantage of low valuations should the current environment persist or perhaps get worse. However I look at it, this company shouldn't mess shareholders around, no dilution (apart from employee options being issued for compensation), no lack of free cash flow...the best financials I've seen in the resources without the large risk. Instead of believing me I would actually strongly encourage for all #newbies to understand the business and read the 2016 annual report in its entirety. The value proposition to me is better then the royalty companies in my view and a lot less riskier, and lets not forget this stock will also join in the PING as the commodity price environment improves a potential price gain of 100-300%+ increase say over next 2-10years and a yearly 4-5% dividend at current prices which should increase like last time is nothing to be scoffed at and the company doesn't have to drop that significantly to end up trading below net asset value. Heck if eric sprott owns 23% and rick rule 10%. On my predictions about 10-15% of their net worth... (and both still have at least 10+Years of life ahead of them....it can't be all that bad). http://www.sprottinc.com/media/1226/sii-annual-report-2016.pdf.
@FundamentalAnalysisVery smart..... $SII investing in Sprott resource holdings with the inclusion of warrants. Now if the commodity markets take off, or if sprott resources invests in smart exploration or developers that could make money today...... $SII will gain some of those benefits......this could be very value accretive as long as Sprott resource holdings do a half decent job in picking properly....warrants also give that extra kicker too for being right. There is a lot happening behind the scenes with this company I've been reading reports very closely.... and happy with the underlying potential value creation with substantially less risk then ordinary speculation #newbies#mbgtrends.
SEDI_botSprott Inc. $SII just filed 4 reports. View full report: SEDI:SII
@FundamentalAnalysisThis implies more management fees for $SII in the future. Positive news. Lets hope money is invested wisely.
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@FundamentalAnalysisI'm a big fan of private resource lending as a business model, because that means a lender can make money, ensure the project continues operating including paying out to stakeholders all without accruing much benefits to the shareholders. Think off the many mining companies that fail to generate real free cashflow yet survive as what they do make, they pay off lenders and fully re-invest to continue business. I've seen this playbook before $SII....... #newbies#mbgtrends
@statesideEffective May 10, 2017, Eric Sprott will step down as chairman of the board of directors of Sprott Inc. and will not stand for re-election as a director. Mr. Sprott will continue to hold the title of chairman emeritus. It is currently anticipated that, Mr. Jack Lee is elected as a director at the Sprott annual and special meeting of shareholders on May 10, 2017, Mr. Lee will be appointed chairman of the board. @nasdaq/sprott-announces-new-chairman$SII#ericsprott
@FundamentalAnalysisFor those involved with $SII, I would recommend people listening to the conference call....lots of things discussed in regards to the change in strategy. The company after the deal will be even more cashed up about 334m CAD in working capital/cash with a 530mcad market cap and off course no debt with 5-6% dividends. The working capital will be utilised towards being an investor in the private lending business (basically credit investments - Rick rules strength - and a much safer business model then being an equity investor. Given that Rick rule/trust owns over 10% of the shares...I am quite sure he would have had a say in how this deal goes through....so shareholders of $SII shouldn't lose out. A lot of what $SII will have will be passive investment strategies. I.e physical trusts and etf's. These are low margin but more stable assets then the active strategies. Good thing about Physical trusts is that people are insensitive to metals prices for the most part in this area hence more stable fees for $SII. The active side for now will be focused on lending....what I like here is that the market is no longer broken this means equity financings in particular are being done. Lending is a safer strategy then equity investments....and I'm quite sure for the next few years (bar a global financial crisis) that as long as the equity markets are working....the lending side has even more security (i.e raising equity to pay off the lenders :). Also looking at $SII historical lending side...they have done a decent job in this regards....much better then the active equity side especially those outside the resources sector. So its likely the refocus towards resources could only be value accretive in the long run. $SII continues to have a fantastic balance sheet the best by far in the business...more robust and perhaps arguably a better business model then even the streamers (after accounting for risks)....so we have a heck of a lot of safety even in a Global financial crisis. Some were concerned about EBITDA margins....as I've mentioned before the wider active funds have been poorly performing especially those outside the resources sector and talk was because the wider active funds have more active management related costs the EBITDA margins wouldn't be as impacted as it may appear on the surface and the Sprott team hinted that for the most part the bottom line figures will not be "materially" impacted. Costs like rents/staff costs etc...will all be coming down as well. $SII will be a subadvisor to the active precious metal strategy funds that are being sold (So $SII will benefit from that too). Basically If I were to sum up, $SII has disposed off and removed all responsibility of the active strategies outside the resources sector (these were the poor performers I mentioned in an earliar post). The active strategies within the resource sector some it will be kept completely, others i.e precious metal funds it will simply be an advisor to and will participate in its performance. #newbies#mbgtrends
@Edexter$sii the mutual fund buisness is a declining buisness but if it could trade in the u.s. they can leverage the brand name. I am under the impression they still have funds for high net worth and the closed end fund with this arrangement. Haven't listened to the conference call but I would like to see them in bitcoin and in company coin storage based on reputation and customer base.
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@rackerSprott mutual fund arm to rebrand following deal closing: SAM CEO John Wilson, one of the acquirers, on BNN. $SII
@FundamentalAnalysis@edexter The mutual fund business on the surface appears to be declining due to the rise of passive strategies and ETF'S a strategy $SII is big on. However don't be surprised to see active management back in swing further down the line....we are in times where not only has passive beaten active last 8 years but people are making the switch precisely at a time where I believe more active management is required (i.e being more careful and not as reckless). You are correct $SII have the recent close ended fund under its control. It also has from what I remember the funds for high net worth individuals. I actually think what $SII has now is far more robust. The mutual fund business was performing quite poorly for the most part, I saw that as diversification for the company but also a lagger so its good to have disposed of it to focus on the core competencies. All the strategy $SII has taken now within the resources sector is a much more safer position within the sector. Think of streamining/royalty companies being better business models in a tough sector. I think of $SII on par if not better in terms of margins (after all costs including investment costs) and on par in terms of safety with the royalties/streamers...lending is a solid business and so is management of physical metals and etf's... and the performances for both in particular lending should be good and so will be the fees.... #mbgtrends#newbies
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After seeing the news on $SII, I have to say that the important document to take in would be the 'Undertaking' or Agency Agreement, released April 4, from $SRHI. If you will remember,I had been saying that $SRHI was not necessarily in a capital raise mode, with its short form prospectus, but actually engaged in a stock swap merger with the remaining shares in Golden Band.
Now with the moves in $SII, I can see lending to Golden Band taking place. The amount Sprott raised for lending is nowhere near enough to capitalize the LOM project, but is a 'best fit' to lend to The LaRonge Gold Project.. The April 4 Agency Agreement for $SRHI discusses everything I had been pointing out about GBN, and then some. Closing Date on the Agency Agreement is 8:30 am on 12th April.
@FundamentalAnalysisHi @F6 Please could you simplify the story behind $SRHI. I'm invested in $SII, but came to conclusion on earliar posts (although can't recall story exactly) that the effect on $SII on what you mentioned above would be immaterial. Is that the case?
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What I presume to be the case is $SII will probably become lender to $SRHI or to a subsidiary-in-waiting of $SRHI that may become a part of the company on closing of the agency agreement.
The recent development of $SII makes me believe that this move was long in the planning. The material event would the lending to another company. But your question makes me think additionally that Sprott is looking to consolidate its entire resource sector business. My 2c worth.
A healthy 30:1 reverse split aught to occur somewhere in here. There is a shareholder meeting called for May for $SII, but I think that the result of the vote will probably be a forgone conclusion, since the majority would be carried in the minority.
@FundamentalAnalysis@F6 I do know that $SII will be investing into $SRHI, not sure when it closes but $SRHI was giving equity and warrants to $SRHI remember seeing the numbers. $SII also mentioned they would be an investor i.e as a limited partner within the resource lending fund as well...so not sure how much would actually be left to invest directly in any subsidiaries of $SRHI or further into $SRHI again after that. They have about 140m of cash or so, the rest are still in loans/investments which need to be liquidated if they are planning on doing what you suggest they could do.
From what I know, my assumptions have been correct so far about $GBRIF, and that I think this asset is going to be added to $SRHI through a stock-swap merger.(rather than a capital raise, as the short-form prospectus would have you believe.) I don't think the numbers are certain quite yet, such as being as little as $46m.
Since a capital raise through payment-in-kind from the gold mine in the form of unrefined gold was made to physical precious metals trusts stored at the mint, the gold company has been in reorganization. Sprott takes control of the gold mining asset, but only insofar as the corporate change-in-control is handed to Sprott. The surviving equity interest in $GBRIF gets added to $SRHI, in terms of shares + warrants. Plus a 30:1 reverse split may occur.
Since nothing occurred at the open today, I now expect the shareholder meeting for $SRHI to be the next date to watch, and that the money put together by Sprott, Inc. to be put to use on The La Ronge Gold Project. (a lot of the money has already been spent on the property, and it may just be that the transfer of the remaining capital against cost to be the tax-advantaged strategy.)
The changes to $SRHI and $SII are too co-incident not to be directly connected.
@FundamentalAnalysis@Alan Great link I've running through a few things, will be on the teranga Q1 call, then I'll watch this....its useful for $SII holders as Rick and Whitney will be leading the newly reformed company from my understanding.
@Alan@FundamentalAnalysis- Yeah I've been a happy holder of $SII for over a year now. I consider it an investment whereas $SRHI is more of a #speculation. Yeah I was aware of $SII being involved in the recent financing. I think they own 10-20% of the company.
@FundamentalAnalysis@Alan Yup I'm quite obsessed with $SSL since Dec 16......when I computed how quickly the market cap could be realised in Cash. I saw Warren buffett style value. I also see similar and arguably better value but less upside with $SII where literally 60% of the market cap is cash, zero debt, dividends, and a business doing easy things generating free cash flow, with big insider holdings.
@Alan@miningbookguy- Yeah I see what you're saying. It was more 'dead at the end of 2015. Activity has picked up over the year. But in terms of how I feel, it feels like the end of 2015...especially when I look at my portfolio. It's crazy, I got into #gold and #silver at the top in 2011 and have bought all the way down. It's fair to say that after 6 years I've done pretty terribly as a #speculator. I didn't have a clue back then and got drawn into the mania. As of today, 6 years later' I'd have done much better if I'd of kept all my assets in cash and kept my house I sold in 2013, which incidently was at a interim bottom in house price. To add insult to my wounds, I was mining #bitcoin on my old laptop at less than a dollar. Now you'd need a supercomputer. They would of been worth millions if I'd kept them till today as it stands near $1600 a coin. These missed opportunities and serious losses have been playing on my mind recently. I even considered jacking this profession up recently. But I love this business. It's like a treasure hunt and I'm not quitting just yet. I just hope the last 6 years are a tough lesson and education in the investment and speculative world. I make less mistakes now for sure but those past mistakes stay with me and help guide my decisions now. Sorry for the ramble but I thought this experience may help people new to this game. @FundamentalAnalysis - Yeah I agree with you on $SII and $SSL.
@FundamentalAnalysis@KevinS Wouldn't call myself a veteran.....but if you want to play it really safe $SII is great as a dumping ground. (I've not bought any of that recently but still thinks it a reasonable dumping ground for cash IMO at these prices).......I think from a risk/reward basis $SSL would be one of my top picks at this price level and one I bought into today....to me this is one of the most leveraged streamers/royalty companies riskier then $FNV and $SLW but will behave like a junior producer in the next run (without as many risks)....its practically halved since Summer 16, and there is a long way up potentially, the company generates FCF and has visibility for this into the future if you are patient. I'm also liking $TGZ and $SMF at these levels @Jayfire has written an article about $TGZ.... the risk is gold getting smashed below $1200 with $TGZ otherwise its quite solid and has a lot of embedded value. $SMF is a little more expensive but has better quality properties compared to $TGZ.
@FundamentalAnalysis@Excelsior True, I think it depends on the type of stocks you buy....with optionality plays....the fact is they don't make money know which means valuations are just going to swing so you have to time it. But say with a streamer, you can apply good old fundamentals and buy at a good price and you will more likely be right. For example look at $FNV last few years. I have $SII and $SSL as amongst the top 3 positions and the valuations for those are dependant on fundamentals longer term. But I also have say teranga and for that timing is important as its impossible to know what will happen next if we had a half decent rally I would sell some.