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Agreed. It all comes down to the personal value of money. If I watched $350,000-700,000 drop to about $70,000, I would hold on until the new 43-101 and KC mining results. That will likely be after another round of financing, which will bring the share price lower. At that stage, it is time to re-evaluate. That is just me though. It is highly likely this thing will drop lower, probably sub-6 cents (just my guess). That means $35,000.
Of course everyone knows this, but exploration stocks are extraordinarily risky - to the extreme. It is still highly possible that this company will fail, and if $70,000 meant eating or not, that would probably change my perspective.
Worst case scenario, we lose everything of course. Best case scenario, we grow this resource to $3M or better, hit high grade base metals at Kidd Creek, and sell both properties in 2013/2014/2015. If all of that happened, who knows? We might hit $5 or more a share with 180M shares fully diluted.
I imagine we will wind up somewhere in between. I cannot present any numbers to justify that we will be back up to $1.60 anytime soon, however.
The pain will be holding until we whet a major's appetite, and that could be another year, easy. Considering we will see lower prices. I imagine most people will bail out in the end, before things turn around. In fact, I kind of count on it.
BTW, to those that talk trash on the Mining Speculator, his #1 pick today hit a 150% gain from this year's lows. I am not thoroughly impressed with his work. At some times, I am somewhat dismayed by what appears to be a lack of energy or interest on his part, but I have seen several of his picks turn out well over the years. Has anyone tried Brent Cooke's Exploration Insights? Can anyone recommend anything of a higher caliber than the Mining Speculator? (And please don't say Insider Alert.) I am looking for something that will teach me more about this industry, after having watched it for a few years.
I believe I understand now why LSG is priced so low.
They have $60M in current liabilities.
In light of this, everything else I posted previously should emphasize the risky nature of investing in LSG right now. After they knock this out, I anticipate a large share price increase in 2014, barring any major difficulties.
A lot can go wrong in a year. Why would investors want to invest in LSG and wait around for a year for big gains when there are other projects?
Ask Franco-Nevada and Sprott Lending.
With all this said, I cannot emphasize enough that comparing LSG to an EXS buy-out, for instance by AEM, is like comparing an apple to an orange.
It is not a valid comparison.
Agreed on CD. I have always kind of felt that way about him, but that is partially why I like him too.
And you are correct that the analysis is high. Taxes, the NSR, etc. were not taken into account. Still at a 50% discount to my estimate, you have a 10+ mark-down to mine the resource. That seems still incredibly underpriced.
The primary issue that concerns me with LSG is the LOM only appears to be 5-6 years. At 102M long-term debt, they need to throw $20M a year at that to pay it off in 5 years (which may not even be an option depending on when it comes due). Still, at a 50% discount to my numbers, you are looking at a $60M in profit a year in 2013, which is enough to cover a $20M debt repayment.
All speculative. The devil is in the details. Rather than LSG having anything to do with it, I like better the idea of AEM swooping in to purchase the property in 2013/2014 to throw Goldcorp off-balance. We will probably be sub 6 cents by then though, unless we hit at KC this winter.
I doubt I will invest in LSG. Then again... I might be kicking myself in a year for sidestepping them after this analysis. I am too interested in other things right now, I believe, but who knows. I change my mind frequently. For now, I am long EXS, and that means even if we go sub 6 cents. However, if KC turns up dirt, and we are not at 2M+ oz at TPW by end of 2013, I might begin to think otherwise...
The market cap includes assets, if investors are paying attention, which I claim they are not, but you are right that I did not include such assets in the EXS evaluation.
That was not the intended point. I will try to better explain.
The latest interview with CD indicates that our indicated resources should be easily priced at $100-$200 an oz. He then went on to say that the inferred would be at $50-$100 oz. (He said the inferred is priced at 50% of the indicated price.) The interviewer agreed.
My point:
Either they are incorrect in the interview or the market is incorrectly pricing LSG's resources @ <$50/oz.
I will point out a few things, and you can decide who is wrong, the market or CD.
LSG PEA (on their website) -
Page 177 - Production Summary = 798,504 tonnes in 2013
Page 215 - Estimated LOM Operating Costs = $113.24 / t
798,504 tonnes in 2013 = 124,354 Au oz. (according to page 177)
$113.24 * 798,504 tonnes = $90,422,592.96 cost for 2013
$90,422,592.96 / 124,354 Au oz. = $727.14 cost per Au oz.
124,354 Au oz. * $1700 Au price = $211,401,800 revenue in 2013
$211,401,800 revenue - $90,422,592.96 operating costs = $120,979,207.04 profit in 2013
Final metric:
$1700 Au price - $727.14 cost / Au oz. = $972.86 profit per oz
$46 / oz is cheap. That is a 21x mark-down to mine the resource. Seems worth the risk, unless I am missing something about LSG.
Here are their reserves/resources:
http://www.lsgold.com/Mines-Projects-Properties/Reserves-and-Resource-Base/default.aspx
Added up, you have:
8,713,211 oz.
$280M market cap (if the market is efficient, which it is obviously not, this includes assets) + $102M debt = $382M
$382M / 8713211 oz = $43 / oz
This is potentially a dangerous metric because it is hard to say if all of their resources are accessible/mine-worthy. Some of them are lower grade (~1-2 gpt) and could cost more to extract.
(The post below is of low importance.)
One last comment about the numbers I posted. They are definitely not exact. Cash on hand would be factored into the market cap (should be). Therefore, you would have to subtract that from the $280M. On top of that, if there are other deposits (apparently there are) in their control, those would need to be factored into the overall oz. number. If those oz. are in the Yukon, for instance, they are probably not worth the same amount as those they have in Timmins.
Regardless, what it really comes down to on a producing mine is their cash cost to produce an oz. of gold. I am not sure what that is for LSG, but it appears that LSG is horribly underpriced. And it appears we all agree that EXS is also underpriced.
If anything, my expectation would be that EXS's oz. would be worth much less LSG's oz.
I do not follow LSG, but all of this discussion is beginning to make me think I should be. If anything, it will be a good story to watch in light of EXS, which is what you have been doing for a few years now. I have apparently missed out.
Thank you for posting. Your insight is helpful and thought provoking.
You're right. I am still here because of Kidd Creek. How perceptive.
Here is another tidbit.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=22544000
I cut my teeth on this bad boy. Ah... memories.
Old DD from 2007 I did. Tried to warn everyone a long time ago.
(See original post to which I just replied.)
-- Begin Quote --
Deep Blue Marine (DPBM) CEO Wilf Blum has an interesting quadrangle of companies working together.
First, he is CEO of DPBM, a public treasure hunting company. DPBM chose Stock Information Systems (AKA SIS) as its investors relations group. Wilf owns SIS (website went down a few weeks ago, http://www.stockinformationsystems.com ). That's not so bad... but wait, it gets better. Wilf is also private owner of Alexander Lindale, which sponsors public companies (helps fund them). Alexander Lindale VERY likely received discounted shares to provide "funding" for DPBM. Alexander Lindale's old website has now disappeared (in July/August, http://www.myotcbb.net or http://www.myotcbb.com ). Before it vanished, it had DPBM as one of the sponsored companies. In addition to all of this, Wilf also created another company called Marine Equipment Leasing and Recovery. Apparently, Wilf bought boats with shareholder money and then somehow transferred ownership to his private Marine Equipment Leasing and Recovery company. PRs from 2006 indicated that DPBM bought the boats and not Wilf personally. Even if he did somehow originally purchase the boats with his Marine Equipment and Recovery company (his own money), for over a year now, DPBM leased these boats from him through that company.
Rumors are flying around, supposedly Wilf is saying that he doesn't care what the stock does because he's already made enough money to retire off of it! Another rumor is that Wilf has boasted he gets a huge tax write off if the company goes under this year (year 2 of operations). Of course, these are just rumors. Therefore, they hold no weight. However, what does hold weight are the numbers. DPBM is totally diluted. If I recall correctly, there are only 5 million shares left to distribute from the 500,000,000 A/S (494,923,790 O/S).
My hunch, and it is just that as this would be impossible to prove, is that Wilf sold tons of stock to his private Alexander Lindale company at a discount and then shorted DPBM into oblivion.
Relevant posts:
http://investorshub.advfn.com/boards/read_msg.asp?Message_id=22547028&txt2find=alexander
http://investorshub.advfn.com/boards/read_msg.asp?message_id=22544000
-- End Quote --
According to LSG's website they have at Timmins West 3,883,000 oz.
280 million dollar market cap / 3,883,000 oz = $72.11 / oz
If you add the $102 million in debt:
$280M market cap + $102M debt / 3,883,000 oz = $98.37 / oz
This does not include the 2.5% NSR with Franco-Nevada. If you include that, take 2.5% away from the 3,883,000 oz. = 3,785,925 oz. (This is of course, not exact, but just to see what it looks like...)
$280M market cap + $102M debt / 3,785,925 oz = $100.90 / oz
An additional thing to keep in mind is that it seems like much of the gold at LSG and quite a bit of EXS's is >500m deep, which makes it more costly to extract.
Now, according to the interview posted with CD, inferred should be priced at about 50% less the indicated. He agreed in that interview that $100 / oz is reasonable for the indicated and that $50 / oz is reasonable for the inferred.
That leaves us at a potential $60M market cap (200K indicated * $100 + 800K inferred * $50), which is what they said in the interview.
LSG Timmins West Mine:
2,737,800 oz (all categories)
(Note: The NRH report on page 7 indicates that LSG's Timmins West Mine only has 1,870,000 oz in all categories.)
http://www.lsgold.com/Mines-Projects-Properties/Review-of-Properties/Timmins-West/Timmins-West-Mine-Operating-Mine/default.aspx
LSG Gold River Trend:
1,145,200 oz (all categories)
http://www.lsgold.com/Mines-Projects-Properties/Review-of-Properties/Timmins-West/Gold-River-Trend-Property-Exploration/default.aspx
Here is an interview of Rick Rule (11/27/12):
Interview Link
An interesting quote:
"The second thing, and it is somewhat hidden, is that we are coming into a discovery cycle. In the next 12 to 24 months, we are going to see reasonable, maybe spectacular, discoveries with increasing frequency. This is a market that rewards tangible results, for example, GoldQuest Mining Corp. (GQC:TSX.V) going from $0.06/share to $2/share; Reservoir Minerals Inc. (RMC:TSX.V), $0.30/share to $3/share; Africa Oil Corp. (AOI:TSX.V), $0.80/share to $10/share. There is nothing like discoveries to add hope and liquidity in the junior market."
I am sure it is still not an apples-to-apples comparison, but I would be curious to evaluate the similarities between GoldQuest and Explor. I did not follow the GoldQuest story, and it may be that they found an incredible resource. Nevertheless, I will be investigating the above examples further, as time permits. If someone else here is interested in doing the same, please post your research. I would be grateful to read it.
It is your money of course, but I am hesitant to use LSG as an apples-to-apples comparison. They have over $102 million in long-term debt and a 2.25% NSR with Franco-Nevada. Elimination of these would raise the $46 per ounce evaluation you stated.
$46 multiplied by our approximate 1M oz is still 46 million dollars. We are sitting at a $15M market cap right now.
Excellent interview. I kindly thank you for posting this.
The most important point in the interview, in my opinion:
"...If your project is in a very remote location, an evaluation of let’s say $50 an ounce may be correct; if you’re in a more developed area, where the infrastructure and a trained and educated workforce is in place, then the value per ounce is significantly more so I’d probably say in the Timmons Camp an undeveloped resource is probably worth anywhere from $100 to $200 an ounce easy."
Been watching the company for a few years now. I'm in. 150,000 shares.
Bottom line. They have highly accessible gold, and it isn't low grade junk. Second point, they have to do something fast. Nothing quite like the fight in a cornered animal.
I'm in for the long haul, upcoming PP or not.
Sure. I took a look at AEGP, and it does not look like they are keeping up with filings. This is not the end of the rope, necessarily, but I prefer to see regular filings (see below).
Copied from the Dormant Shell's board:
http://investorshub.advfn.com/boards/board.aspx?board_id=9916
How to value a Shell Stock
MAJOR CONSIDERATIONS
VERIFIED SHELL STOCK LOOKING FOR AN ACQUISITION: it should be actively looking for a reverse merger. Verification can come from SEC reports, news releases, or verbally from company management.
EXPERIENCED MANAGEMENT: management must understand the mechanics of a reverse merger and know a good business opportunity. If management is not experienced, it is imperative they are working with an experienced consultant.
SEC REPORTING: it must report regularly to the SEC. This is known as a "reporting company." We want to be able to verify information about the company from public/legal filings . . . not by word of mouth or rumor. Believe it or not, there are public companies that are non-reporting.
CLEAN: it has little or no debt, no pending law suites, and little or no outstanding convertible securities (preferred stock or warrants). We don't want anything that can complicate the reverse merger.
SMALL NUMBER OF OUTSTANDING SHARES: the smaller the number of outstanding shares, the better. A smaller number of outstanding shares lessens the chance of a Reverse Stock Split. A Reverse Stock Split can lessen the chance of price appreciation.
LOW MARKET VALUE: basically, this is the buy low sell high rule. A Shell Stock with a low Market Value will have a greater chance of price appreciation than one with a high Market Value. (Market Value = price X shares outstanding). NOTE: the Profile List by Market Value sorts the Shell Companies from low to high Market Value.
CASH ON HAND: some Shell Companies have cash remaining from their previous business endeavors. Having cash to fund the new company's business plan will attract high quality candidates.
MINOR CONSIDERATIONS
TAX LOSS CARRY FORWARD: the new company can offset future net income with the Shell Stock's Tax Loss Carry Forward.
EXCHANGE LISTED: it is better for the Shell Stock to be listed on a stock exchange (NYSE, AMSE, NASDAQ, OTCBB). But, there are some quality Shell Companies that are trading on the Pink Sheets.
INDICATORS
INCREASED VOLUME/PRICE: increased volume and price with no news may be an indicator of a potential reverse merger. Information on a reverse merger sometimes leaks out and insiders/family/friends start buying before the reverse merger is announced.
CORPORATE ACTIVITY: cleaning up debts, law suits, and issuing reverse splits can indicate management is getting the shell company ready for a reverse merger.
Post your dormant shell plays here.
-======================-
AEGP's filings --
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=882800
On their 15/A --
-[16]- Rules 12g-4 and 12h-3 currently allow for
termination of registration of a class of
securities under Section 12(g) and suspension of
the duty to file reports under Section 15(d) when
the class of securities is held of record by less
than 300 persons, or by less than 500 persons
where the total assets of the issuer have not
exceeded $5 million on the last day of each of the
issuer's three most recent fiscal years. Also,
the Section 15(d) reporting obligation cannot be
suspended under Rule 12h-3 for a fiscal year in
which a Securities Act registration statement
relating to the class of securities becomes
effective. The revisions amend Rules 12g-4 and
12h-3 to change the asset test from $5 million to
$10 million.
Looks like Kip payed 0.06 / share. So, anything under that might be a bargain...
Transaction Type / Date Current Average
6 Month Return Shares /
Market Value Price Range Total Holdings
Eardley, Kip
Purchase
4/1/2011
-- 200.0K
$11.8K $0.06 - $0.06 15,319,500
Stock Ownership
R/S is typical in shell plays... at least from what I've seen. Comes with the territory... 1/10 is not that bad, actually. Seems like it is usually something like 1/100 or 1/250. FWIW
PNHV finally saw some action today.
Yeah... doesn't look like they have a lot of debt on the balance sheet too. The problem is volume... these suckers are completely dead and rarely see any action. Have to watch them... possibly for a long time too...
I got out early. Missed the big leap, but I wound up with a nice profit. Wasn't as good as others... no big deal. Could be worse. Point is, I figured it would crash right after the R/S. If so, and if we are still a shell, I will buy back in.
The general rule is, stocks go down after an R/S. Every one I have seen it happens that way. I am curious to see where it lands and if it lands before the R/M.
Of course, I could be (and often am) wrong, but personally, I take all hype and chunk it out the window. Hype does your pocketbook wrong... that is, unless you understand that it is just hype...
GLTA
Looking at the 10K... I get a sense the new guys might run things better. I like some of the changes to the layout, like the specific criteria for new merger targets... or has that always been there?
20 for 1 R/S not bad. Will take us beyond the 15 cent target so many have mentioned. lol
Patience... again. :) Wonder how long it will take the Chinese to move this shell. Ditanna and Meuse apparently couldn't find anybody to merge into it... so now, we've got Lu.
3rd time's a charm, right?
All of Belmont's insider transactions on Yahoo!
http://biz.yahoo.com/t/48/7569.html
Rock'n'roll. Been waitin' on this puppy for a while. Lovin' the shell plays right now.
Hmm... decent volume today. +730,000.
My broker's electronic price reads N/A. Hmm...
Never mind... this is just the old Alma CEO. Probably the others are just related to Alma as well.
From: http://findarticles.com/p/articles/mi_m0DTI/is_n10_v24/ai_18726431
"Marsha Feltingoff, owner of Alma International Inc. in Boca Raton, Florida, points out you can no more use the same marketing strategy to reach a black teenager and a black baby boomer than you could to reach a black teen and a white senior citizen."
I figured that would be the case but couldn't remember those involved.
From http://otcbb.com/profiles/DYER.htm :
Management
Name Title
Fred S. Arlotta OFF
Alfred F. Gerriets OFF
Are these the same that have been listed or is this new? Can't recall.
Stock is restricted. No electronic buy-orders using my broker.
From All4All on 1/5/08:
"Ditanna sold a shell (DEXT) in December to a chinese company. They had a huge RS 500/1 in July to come down to 25 million OS Although Ditanna only shows up in November (Randall K. Boatright was the CEO), the address is the well known DYER lawyer address since 4/2007, time they filed a bunch of 10K, 10Q, etc. They were under reorg from BK. So if they repeat the same fast shell sale, and assuming the company will be full reporting very soon, we maybe looking at xmas in spring"
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=25760258
From 53chevy:
"DYER looking interesting the more I dig! Dittana used to own the shell 'Dexterity Surgical' until he sold it in December, 2007. Now trades as 'CHIO', with current pps of $4.40!"
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=31206737
Understand the present. Create your future.
This just made my day. :) I'll add this to the board.
Yawn. More sales.
In the date field, it reads "Date of Event Requiring Statement." I wonder what event triggered the filing of Form 3? Hmmmmm... :)
I have good feelings about this one. Have had for a while. Of course, that doesn't mean anything.
If I remember correctly, the company said they were definitely looking in that last report. Therefore, I agree... it shouldn't take forever to find a company. Just the market... with the market the way it is... I would think companies would wait a little while to go public. Maybe September.
Understand the present. Create your future.
Regardless, doesn't mean there isn't money to be made here. I think Tommer has made quite a bit playing this one. I wish I'd have had his insight or luck, whichever it is.
I agree. I've seen it before in other tickers.