Juniors with Near Term Production

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Wed, Aug 24, 2011 - 6:14pm
TheGoodDoctor
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Brigus is starting to ramp up

Brigus is starting to ramp up more production. Sprott and Ron Paul own it. They have also been getting nicer assays too. I think it is the Black Fox Mine is what is producing and the nearby property is where they pulled the assays.

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Norm Franz
Wed, Aug 24, 2011 - 6:51pm
metcoalfan
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I'm with ya Doc....

This list probably needs to move from nanocap of <50mm to microcap of <300 mm. I think production now or fully funded within 6 months is really key given the state of credit markets, and it's a thread meant for tickers to have in your back pocket when that is what you want to do some more dd on quickly. There are a bunch in the 100 to 300mm range and I'm weak on them.....I'm very cheap but aware it might be as sweet or even a sweeter spot. I'll let the big boys fight over the 300+ miners for now, and then they can fight for my shares as these fish graduate to the big pond.

Wed, Aug 24, 2011 - 6:56pm
metcoalfan
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I have a friend who sells used mining equipment...

and the financings have been getting inceasingly difficult, mostly via the banks enforcing longer fund holdbacks. The deals in question have all been in Africa.

Wed, Aug 24, 2011 - 7:00pm
TheGoodDoctor
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Well metcoalfan I only have

Well metcoalfan I only have smaller positions. Nothing more than about $400 worth to spread risk across about 20 stocks. Personally when reading and doing DD I can't believe some of these prices on things. I mean if one goes simply based on ounces in the ground and unexplored property, you really realize that some of these companies will either be bought out or get some nice valuations when attention gets brought to their stories.

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Norm Franz
Wed, Aug 24, 2011 - 7:54pm
metcoalfan
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But a lot of the explorers are moose pasture...

And I'm not a geologist, so it's hard to evaluate the explorers. Sulphide deposit, gold poryphery, carlin style ore body...it's hard to keep straight. I posted a link on BOGs page yesterday for an intercept calculator, and I'm really embarrassed I didn't visualize the math earlier....an explorer reports 100 meters of 1 gpt, including 10 meters of 9 gpt. After 3 years I can finally conceptualize how awful that is, but the 10 meters of 9 gpt used to get me excited. It's a thin uneconomic vein surrounded by 90 meters of crap. How many other ways can an explorer con me? If mgmt can round up the dollars to attempt production, then at least they've conned folks smarter than me....and I don't mind losing that bet from time to time. Fucking ATW Gold. The bastards. I came to the miners after 10 years of nothing but following bankruptcies...I want max upside for min downside. And here with some of these I'm getting great cash-flow for bk prices, esp. below 100 mm, but as I said, it's really a thread of tickers not fully fleshed out but just with potential as a future reference source for ideas, and my first thought at looking at Brigus was that it was close to 300mm. I realized I was leaving a good chunk of opportunity unexplored, though personally, those companies over 100mm I will hold to a higher standard for now.

Wed, Aug 24, 2011 - 8:02pm metcoalfan
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I can wait a couple of years

I can wait a couple of years on the moose pastures. I've done a lot of DD. I might have one or two that are purely speculative, but like I said either they will be bought out or they will hit with some nice JVs to boost their price. I'm in it for the next five years minimum. The USGS says that silver will be the first mineral on the periodic table to go extinct. When? 2020. That's more my timeframe. But we will see nice gains before then.

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Norm Franz
Thu, Aug 25, 2011 - 2:05pm
bobby
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Fire River Gold--AGAIN!

Thu, Aug 25, 2011 - 5:18pm bobby
TheGoodDoctor
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Looking good!

Looking good!

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Norm Franz
Thu, Aug 25, 2011 - 6:00pm
metcoalfan
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Nice move on Fire River

Doc - I think all the gold miners will do extremely well over the next few years, but they may go on a tear in stages, so the sequencing of buys may wind up being the difference between making 5x your money or 25x your money, not that I'm greedy ;).

Take an oversimplifcation where there are just 5 stocks, all at a buck and all 5 will go to 5 guaranteed. Buy the basket and you make 5x. But if they go to $5 at varying speeds, there is oppty to make much more than 5x by properly cascading back from front runners to laggards. Of course in the real world, they don't all go to $5 and they don't all start at $1. How do you best balance risk and reward given different subsectors within the gold miner industry and highly inefficient pricing within those subsectors? All I do know is I'm racking my brain on a daily basis because if I happen to get it even remotely close, I'll never have to do it again, and opportunities like this aren't always there.

Thu, Aug 25, 2011 - 7:12pm metcoalfan
TheGoodDoctor
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Well Doug Casey (and Bag O

Well Doug Casey (and Bag O Gold in her thread) say when you get a double sell half and let the rest ride. It's called taking the Casey Free Ride.

This has been my plan but I got stuck on the downside after I had a few that doubled. Won't try and do that again.

Then you roll it into other gold/silver stocks that you have been researching to keep building and perpetuating you portfolio. So, keep a good buy list handy. Now, with your theory you could roll that capital into another stock in your group of five if it takes a down turn and I think Bag O Gold even has said that she has done that or simply bought more if one of her holdings is knocked down too much.

More so to apply your theory however, I would simply add capital if it goes down past your original buy price if you believe strongly in it. Like Livermore says "Be right, sit tight." Collectively we have enough smart minds here to help us in evaluating these miners to be successful. Bag O Gold an mrgneiss have had success already. And I am thankful that I can learn from them, Lord knows I don't know it all, but want to.

Another thing is options, and private placements/warrants. These are things I would like to learn more about. These are methods to leverage the amount of shares you can acquire and at cheaper prices. So there are other methods to enhance your trades. So, I am really interested in becoming steeped in this knowledge.

Sprott owns Fire River Gold. I got in at 50 cents. I think this one could jump after third quarter. I am holding this until it gets to 100 million market cap (then Wall Street can buy in) and maybe will wait for it to run to $2. When it gets there I will sell half and roll into something else of good value/potential.

With those continued great assays I just don't see how it can't. Silver/gold are almost even in gpt in these assays. And I have read that when you get those ratios that there is typically more gold to be found. A mix of silver/gold is called electrum.

Lastly, when you get a checklist going of what to look for regarding a potential investment you can assign a number (1 to 10) to a list of 1o things that are metrics that you look for in a company. Now for instance, I am biased towards Sprott and Pinetree Capital. I will pretty much buy if I know they own it since they do their homework. But I will verify some DD first.

So, that is one metric you could use. Another might be the folks that run the company. Have they had success in the past? Or I like ounces in the ground and also large swaths of unexplored property in a known producing historical mining district. You can assign a value to these things and add them up. If you get a 90 to 100 you buy. You could go with 20 metrics 1 - 5 or whatever. As long as you have some method to your madness that is important. Now the way you can tell if you know the stock is if someone asks you about it and you can rattle off 10 reasons you love the stock. Can't argue with someone that knows their shit!

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Norm Franz
Thu, Aug 25, 2011 - 7:17pm bobby
mrgneiss
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bobby

bobby wrote:

news:

https://www.firerivergold.com/i/pdf/082511FAU.pdf

Anyone know why they are flying tons of concentrate as opposed to road, rail or ship? FedEx was too much? I like you guys, and I hate to say this, but their management sounds incompetent.

Link to our updated penny stock list: https://www.kitcomm.com/showthread.php?t=68585 "The conscious and intelligent manipulation of the organized habits and opinions of the [public] is an important element in democratic society." Those who control this have the real power.
Thu, Aug 25, 2011 - 8:56pm mrgneiss
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mrgneiss wrote:bobby

mrgneiss wrote:
bobby wrote:

news:

https://www.firerivergold.com/i/pdf/082511FAU.pdf

Anyone know why they are flying tons of concentrate as opposed to road, rail or ship?

Rule one is assess the situation. It is such that this is their best option. And the numbers are very rich. I suspect they have more than one glory hole coming.

I know you saw the grams per ton for AU and AG, the copper is what we call lagniappe.

And they're located adjacent to some significant money, with year round operations.

And, they are producing. I reckon I can ride this bus awhile.

Thu, Aug 25, 2011 - 9:15pm
metcoalfan
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Doc

I agree with all your points. But what I'm trying to get at and would love to see a robust debate on is whether there is one more variable to include. You'll notice all the criteria you listed are really based on comparing company specific metrics as measured against long standing criteria within the gold sector. What I'm getting at is if there were to be a flood of new money into the sector, how will that new money weight traditional tradeoffs between different phases in the development cycle of a mine. There could be a bum rush, and sometimes crowds irrationally fixate themselves. Put another way, if you were buying dotcoms in 1998, would you have done better by picking those that truly had the best technology, or those that had the best story? (assuming there had been a gold mania 10 years before and you knew not to get to greedy). What stories would have been the best to pick and when? Not saying it will be exactly the same....we all learned lessons about actual cash flow etc the last time around...so we will probably pick opposite but equally absurd metrics next time around. Am I sounding crazy? Is that a variable that should be used to break ties between two companies we find equally appealing but are in different stages of development? If so what are the sweet spots and why? Enjoying your perspectives.

Thu, Aug 25, 2011 - 9:58pm metcoalfan
TheGoodDoctor
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@metcoalfan Well, my guess is

@metcoalfan Well, my guess is the large caps Gold Corp., Silver Wheaton, Barrick etc. would draw the most money initially. Followed by mid caps like El Dorado, Kinross, Yamana etc. However, I think that many juniors, micros and explorers would draw cash too. Really the sector will blow up like the Internet stocks.

I think Embry has said this. Eric King of KWN said there were many penny and dollar stocks in the late 70's and early 80's that went from .08 or $1 to $400 a share. This is why I think it is important to know your ounces in the ground. Because that "potential" is what will send things up fast.

Someone posted an awesome photo of like 50 gold/silver stocks that equaled the market cap of Apple. It was truly amazing seeing that. I don't know where that was but it was awesome.

This link may help you here with what you are looking for. I've posted this before elsewhere.

https://www.zimtu.com/s/Investments.asp

This might help with some education too. Free stuff. Rick Rule's site.

https://www.gril.net/education

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Norm Franz
Fri, Aug 26, 2011 - 12:04pm
metcoalfan
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Mr Gneiss

>>Anyone know why they are flying tons of concentrate as opposed to road, rail or ship? FedEx was too much? I like you guys, and I hate to say this, but their management sounds incompetent.

Nixon Fork Mine is out in the relative boonies - which is why it has an onsite airstrip. As mgmt has said, if the infrastructure wasn't already there and paid for by others, noone would attempt to mine it from scratch these days - even the dozers have to be flown in. Their estimate for replacement cost of necessary infrastructure just to service the mine is 150 mm in today's dollars, but it was there and they picked it up for 3 mm. FedEx has a max weight per package of 50lbs ;) - I'm guessing the roads cant handle heavy loads.

https://www.petroleumnews.com/pntruncate/754525499.shtml

Fri, Aug 26, 2011 - 12:26pm
metcoalfan
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Doc

I completely agree with you that the Tier1s and then the midcaps move first if there is a big inflow of money, and that sort of bothers me a bit because I can't pull the trigger on those even though it seems to make the most logical sense. Somewhat ironically, they have not been the best bets over the last 3 years as some new money has been coming in, not even close. Barrick is at 50 from a brief bottom at 20. Many of what were the little guys that are still not even close to being midcaps have meanwhile run 10x or better. Would more money flowing in distort this or exaggerate it? I don't know. Ounces in the ground is very compelling in my gut, especially cheap ounces in the ground. Somehow I suspect that the near term feasibility of actually extracting those ounces is important too, though whether 6 months is any more important than 18 months I'm not sure. Will the market value very early stage ounces with an overly large discount? In the short term, I believe the supply curve is quite inelastic, so arguments about gold being overvalued based on average costs of production don't hold any water, but over the longer term, maybe more of a concern. Of course, if the demand curve keeps shifting, it may be that the average cost of production matters far less than the at the margin cost of bringing ever more gold to the surface, which is certainly much higher than average costs. That has certainly been true of petroleum. I've seen those numbers that Embry and King both reference, though they certainly didn't hold those prices very long. I know this, I played the dot.com's, but I played it without forethought, and didn't keep a dime at the end of the day. This time around, I want to make 50x as much and keep a big chunk of it.

Fri, Aug 26, 2011 - 12:28pm
metcoalfan
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Lagniappe

Bobby, you got roots in Louisiana?

Fri, Aug 26, 2011 - 2:50pm
HCA
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TLR

Timberline is a very interesting soon to be miner. With only 79.1 mil shares outstanding and it's own drilling subsidiary, it has great potential.

The management does not have the communication skills like Rob McEwens, properly more like Claude. Which is way so far it's relatively undetected.

Although this article is a bit old, it's very thorough and the fundamentals have only improved since then.

https://news.goldseek.com/FeaturedPR/1293549010.php

Fri, Aug 26, 2011 - 8:19pm metcoalfan
TheGoodDoctor
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I think you will be able to

I think you will be able to do that using the methodology used by Casey/Bag O Gold.

My point is, that pretty much any company that has a large amount of gold/silver in the ground will go up. The smaller companies will get swallowed up. They know the gold/silver will be mined at some point. Look at some of the PE ratios on Wall Street right now. Apple, SalesForce.com, Chipotle. I mean it is ridiculous.

The PM miners are getting no love. But when they do it will be a site to behold. Remember that historically investment has been 5% in gold/silver. So, right now I think we are at 1/2%. So imagine 10 times the money suddenly being pushed into gold/silver/miners. And I think it will got higher than 10% when it is all said and done. If you think Wall Street won't participate in this when it happens you are nuts!

Concerning you problem with not being able to buy the larger companies. Just buy 10 shares or 25 or whatever multiple you can afford. Don't sweat the rest of it. Look to the smaller miners to get some better risk and returns but diversify you risk with the larger companies.

A couple of benchmarks to look for IMHO.

1. Gold companies will start buying silver companies or properties. Barrick and Gold Corp. are two gold companies that have substantial silver oz. Gold Corp has a billion. We have seen some gold companies buy copper companies recently. Barrick and Nova Gold off the top of my head.

2. When you see sovereign wealth funds, pensions, governments, central banks, foundations etc. start buying gold/silver/miners you know things are changing. University of Texas at Austin bought gold recently.

PS Please break up posts into paragraphs for easier readability. Thank you!

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.” Norm Franz
Fri, Aug 26, 2011 - 9:24pm
metcoalfan
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It's not a capital issue with the large caps...

It's a reward vs risk psychological barrier. I prefer a little 'juice' to get me excited each morning, and I don't get that with the large caps. A $50 stock has to work really damn hard to get to $100, while a $.50 stock is just getting folks excited when it hits a buck, you've doubled your investment with both, but one is fatigued on the chart while the other is potentially ready to move in daily amounts that can be significant percentages of your original purchase price. It's one reason I never sell half when one doubles...that is where it's just starting to get exciting. Comparing a 10 cent stock to a 10 dollar stock is even more compelling psychologically if both have the goods on a relative basis, it's just much harder to find a solid 10 cent miner.

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