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Matt, fawtsc;
I don't believe TATF is a ponzi scheme. Rather, it appears to be a company run by owners who are not honest. They're offering 14 year rotation teak to entice people to send them money. They seem completely unconcerned about whether those who buy trees from them will make a decent return on investment. I've posted this link before, and I'll post it again - the link to TATF's projections page.
http://www.tatf.com/projections.htm
They've known for a decade that teak tree owners won't receive distributions for many years after the seven year thinning of their trees, but they keep these distributions in their projections - they've even shortened the time from seven to six years for their 'elite teak clones' They've also known for six or seven years that teak tree owners won't receive distributions for many years after the ten year thinning, but distributions after the ten year thinning continue to appear in their projections.
To me, this clearly shows the Brunners' lack of honesty. If they're not honest in this area, how can anything they say be trusted? Moreover, given that they and their company are in Costa Rica, and therefore are immune to legal action by anyone outside of Costa Rica, it seems unwise to send them any money if there's any hint that they might not be honest. Since you've already sent them some money, I can understand your desire to believe that they're honest, and that you'll get a decent return, but I believe it's wishful thinking.
A1
Justcfrall;
Nice to hear that some of your trees are big. Did you measure enough trees to find the average size of your trees? The average size, not the size of the biggest trees, is what's important for a calculation of return on investment. Also, have you received any payments or any updates on when you might receive any payments from TATF?
A1
Some positives about our purchase of TATF trees:
1) By exposing the truth about TATF on this board, we're reducing the chance that others will be deceived as we were.
2) By sequestering carbon, our trees should help reduce global warming, as well as producing oxygen.
3) To the extent that we believe we have lost our money on this investment, we can write off the investment as a capital loss, which can be used to offset capital gains on other investments.
4) I'm sure most of us will be more careful and less gullible in the future, ie, poorer but wiser.
A1
Rogue;
Thanks for the info. Mind telling me where you located it? I couldn't find the info on SEDAR or Edgar. I checked up on Wega, and, as of April of this year, they owned 18% of Century, or about 30 million shares. In Century's 2007 annual report, issued on Jun 24th, they stated that:
"Our recent share price decline has come from repeated program sales from a significant shareholder who has declined to work with management to move its block of stock. As long as this block overhangs the market, it will continue to cause pressure on the market price of the stock"
Looks like Wega has another 28 million shares to dump, so it might be wise to stay on the sidelines for a while on this one.
Thanks Again,
A1
CMM.V Century Mining
Anyone have any thoughts on this one? It's been beaten up pretty bad (deservedly so, with the closure of its open pit mine and the implosion of its expansion strategy in Peru). Also, its Lamaque underground mining operation in Quebec is taking longer than expected to ramp up, and there are some management credibility issues. Also, they're almost out of cash. Still, the company's market cap is only ~$15 million, and they have a NI 43-101 compliant reserve of about 1.1 million oz of gold at the Lamaque underground mine. It appears their production cost will be $400-450 per oz. Interesting potential if they can ramp up the Lamaque mine, but this one is a penny stock in all senses of the word.
A1
Skier58;
It just occurred to me that the last 3 entries on TATF's 'What's New' page all have to do with new 'investment opportunities'. The most recent 'opportunity' is the 14 year rotation teak clones, then there's the 20-year rotation teak clones, and before that, there's the Cuban mahogany 'opportunity'. TATF is far more focused on finding ways to entice people to send them money than they are on providing a decent return on investment for, or even a decent amount of information to, current investors.
A1
DLKM.ob drops hard on revised report
DLKM dropped more than 30% this AM, when it revised downward the amount of gold contained in grab samples on its project in Tanzania.
http://biz.yahoo.com/prnews/080617/to325.html?.v=34
A1
TATF is claiming extremely high growth rates for their teak.
I was recently re-reading an article by Julio Cesar Centeno about misleading teak plantation claims http://www.treemail.nl/teakscan.dal/files/traders.htm
One method of misleading the public has been to overstate the likely growth rate of the teak trees. The unit of measurement for growth on a tree plantation is the mean annual increment (MAI). This is the amount of wood volume that has been added in a given area of the plantation per year. It is usually measured in cubic meters per hectare. According to the above-referenced article,
'The "mean annual increment" is a convenient technical term which could be considered a measure of the productivity of a plantation. It is the average annual growth at a given age. At the age of 20 years, for example, a reasonable estimate for the cumulative amount of timber from a teak plantation, on good soils and under appropriate management, taking into account what has been extracted, could vary from 180 cubic meters per hectare, to 400 M3 per hectare. This is equivalent to a mean annual increment from 9 to 20 M3 per hectare per year, and does not imply that the same growth rates can be applied at other ages of the same plantation. These figures also include non-tradable timber, particularly from the first thinnings. Only under highly exceptional circumstances, isolated figures as high as 22 M3 per hectare per year have been reported'
I realized that I could calculate the MAI that TATF is projecting for its teak trees. TATF plants its teak seedlings on a 3 meter by 3 meter spacing, which works out to 1100 trees/hectare.
Running through the math, TATF is projecting the following mean annual increments:
Teak grown from seed (25 year rotation): MAI = 23.3 M3 per hectare
Elite Teak Clones (20 year rotation): MAI = 37.8 M3 per hectare
Elite Teak Clones (14 year rotation): MAI = 39.6 M3 per hectare
All of TATF's projected MAI's are higher than what Centeno considers reasonable, and the projected MAI's for the elite teak clones are almost twice as high as the high end of his reasonable range.
More food for thought...
A1
Skier58;
Thanks for the heads up. I particularly like the following paragraph
'We have completed thinnings of some of our 13-14 year old original teak trees and have sawn a number of the logs into lumber. We are very happy to confirm that part of the lumber from the 13-14 year old teak thinnings is of a quality that it can be sold directly into the international market without waiting for any value-added process. The 13-14 year old teak thinnings are producing FEQ, FAS, FAS1, Select, and Nos. 1, 2 and 3 Common teak lumber, as well as some lumber that will still need to go through a value adding process. We won’t know until our sawyers saw many more logs the percentages of each quality of lumber that they will produce.'
There's no mention of the average price received for the 13 and 14 year old teak, so there's no way to evaluate the likely return of the investment opportunity he's pitching.
The Brunners started growing teak in 1992, so they should have been able to harvest 13 year old teak in 2005 - three years ago. They should know by now what percentage of the 13 and 14 year old wood can be graded in each of the above-mentioned grades, and the average price per board foot they can get for this lumber. Since Brunner is not disclosing these numbers, it's likely that the percentage of 13 and 14 year old lumber that he can sell, and the price per board foot, are far below the numbers he put in his projections.
I'd love to hear from a tree owner who actually has received a payment from the sale of the 13 and 14 year old teak. That's the only way we'll get some straight information about what the distributions from 13 year old teak will be.
A1
I took a look at Finca Leola's projections recently.
The projections aren't posted on their web site; you have to request them by e-mail, which I did, at this link: http://www.fincaleola.com/owning_trees1.php
After reading through Finca Leola's projections, it's clear that Finca Leola is very much of the same ilk as TATF.
Their projections are extremely optimistic - for example they're projecting a 38% IRR over 15 years for a purchase of 100 acacia trees (for $4000). There are many other highly questionable assumptions in their projections. For example, they assume that the value of timber from the first thinnings is the same as the value of timber from the final thinnings (except for a 7% increase in wood prices, which is itself optimistic). They also assume that the growth rate of the trees is constant over their entire lifecycle, until the tree hits its maximum height, at which it stops growing vertically, but keeps adding girth at a constant rate. They also group dissimilar trees in their projection tables. For example, they use the same projections for teak and mahogany, even though mahogany grows substantially slower than teak.
On the surface, Finca Leola looks like a more open and honest tree farm, but, after seeing their projections, I wouldn't touch this company with a 10 foot pole.
A1
Fawtsc;
A few questions come to mind:
What is the status of selling the 13 year old teak in the open market, as mentioned by Steve Brunner on this board? How much have they sold (if any), and, if so, what is the average price per board foot? How much does this work out to per 100 trees purchased?
What is the status of the "GIS mapping of all of the farms and plantation areas and reviewing all 2 million trees that we have planted" that Steve Brunner mentioned in the summer 2007 Tree Owners News?
Brunner also mentioned that TATF was negotiating to build furniture for a large catalog retailer. Has anything come of that?
Finally, how much, if any, of their wood have they been able to sell through Tropical American Hardwoods, the company Brunner mentioned he'd set up to merchandise the wood from TATF?
I'm skeptical that you'll be able to get any useful information, but it's worth a try.
TIA
A1
CSI.TO posts new drill results.
This is a gold/pgm junior with rights to the Serra Pelada deposit in Brazil. From the recent price action, it appears the news leaked.
http://www.colossusminerals.com/main/?newsReleases&15
A1
My picks: (for 12-31-08)
oil: $120/barrel
gold: $950/oz
DJIA: 10500
A1
Laggy;
Welcome to the board. And welcome to the club of those who are kicking ourselves for buying trees from TATF. I'm hoping we may be able to get our money back eventually, but it's going to be a long wait.
A1
Petrobank's THAI and CAPRI patents.
The US patent number for the THAI process is 5,626,191. This patent application was filed in June 1995, and will expire in 2015. The US patent number for the CAPRI process is 6,412,557. This one was filed in August 2000, and will expire in 2020.
The Canadian patent for the THAI process (number 2176639) will expire in 2016, and the Canadian CAPRI patent (number 2255071) will expire in 2018.
A1
Bobwins;
Ivanhoe claims about 80% recovery (ie 20% of the bitumen is consumed in the upgrading process). However, in the Ivanhoe process, the bitumen still has to be extracted from the ground, using conventional techniques. I like the THAI process better as well - it looks much cheaper and more efficient than the Ivanhoe process. The main drawback to the THAI process appears to be the API of the oil produced is still fairly low.
A1
CL;
THAI and the Ivanhoe process seem somewhat similar. The Ivanhoe process does in an above-ground refinery what THAI apparently does underground, ie, burns the highest-viscosity component of the heavy oil to provide heat, and by doing so, reduces the viscosity of the oil produced. In the Ivanhoe process, the bitumen is heated, and sprayed onto a stream of blown sand. The coke component of the bitumen adheres to the sand, and the remaining lighter components are separated from the sand. The coke-coated sand is then burned, and the sand is recyled. In THAI, the heat from the flame front apparently causes the coke to adhere to the sand in the underground reservoir, and causes the remaining lighter components to flow to the collection well. As the flame front advances, the coke adhered to the sand burns, and the cycle continues. In the Ivanhoe process, the heat from burning the coke is used to heat the bitumen and to generate steam, for a SAGD well, for example.
The Ivanhoe process can upgrade API 10 oil to ~API 30. Ivanhoe claims the upgraded oil is essentially 'bottomless', ie, it has no highly viscous component.
I haven't seen any information on how much the THAI process upgrades the oil - if anyone can provide a link, I'd appreciate it.
A1
Unfortunately, I was unable to register on the DIYbanter board.
Perhaps someone else would like to try?
A1
Some interesting news from China and India:
http://www.steelguru.com/news/index/2008/05/18/NDU4Mjk%3D/Chinese_industrial_output_in_April_surges_by_15.7%252525_YoY.html
http://www.steelguru.com/news/index/2008/05/18/NDU4MTA%3D/Power_shortage_makes_firms_rely_on_liquid_fuel_captive_plants.html
In the first link, Chinese automobile production is reported to have risen 22% YOY, whereas Chinese oil production only rose 0.5%. In the second link, it's reported that many industrial companies in India are generating their own power using oil-based fuels, because of the power shortage in India.
A1
A message I just found on another board.
http://www.diybanter.com/showthread.php?t=190037
Too bad the post is so old. I'm going to get an account on this board so I can post a request for more information, but it may be too late.
A1
Fawtsc;
As I understood the communication from Group Dunami, they were hoping to sell logs for $900/m3. This is a high price for Central American teak logs. From the Dec. 1-15 2007 ITTO Market Information Service report, the prices in Panama for teak logs FOB Balboa were:
Girth Diam Avg US$ Avg US$
(cm) (in) per m³ per bd-ft
40-49 5-6 $163 $0.38
50-59 6-7.5 $195 $0.46
60-79 7.5-10 $223 $0.53
80-99 10-12.5 $275 $0.65
110-130 12.5-16 $335 $0.79
131+ 16+ $365 $0.86
Fawtsc;
Thanks, I added the globalwood.org to the list of links.
A1
Curlews;
The concerns I have about ROK.V are:
1) Haven't executed to plan in the past.
2) Still only have a small mine permit, which only allows them to mine 75,000 tons per year.
3) They're hoping to receive a regular mining permit before the end of the year, but don't expect to apply for it until some time this summer. They may not get the new permit in time.
4) Their current tailings pond is designed to hold a max of 350,000 tonnes of tailings, which is only one year's worth of tailings at their projected run rate for next year. I'm not convinced that they'll get a regular mining permit with such a small tailings pond. I think a substantial amount of time and effort will be required to design and construct another, larger tailings pond.
A1
Fawtsc;
Haven't found any sites with all the information. I've added a number of links in the intro to this board that, taken together, give a pretty good overview of tropical reforestation, at least from an investment point of view. Please feel free to suggest more links, and I can add them to the intro.
A1
Ohio Lawyer;
If, as you say, you purchased trees in 1995, you, like all other TATF investors, have not received anywhere near the investment returns that were projected by TATF. In 1995, that was a risk that you took, as TATF was a new company, and it was not possible to determine whether the projections would be met.
However, in 2008, and, in fact, as early as 2000, TATF and Steve Brunner knew that they could not sell lumber from 7 year old teak for anywhere near what they projected. It has also been clear for several years that they cannot sell the lumber from 10 and 13 year old teak trees for anywhere near what they projected (and continue to project).
Despite their carefully worded disclaimer, continuing to post these highly inflated projections on their website, with full knowledge of and no mention of the fact that they have not come close to meeting these projections in the past 16 years, is extremely dishonest, and, in my opinion, fraudulent.
As I have re-read the material on the TATF website, and become more aware of the true situation at TATF, largely through the posts on this board, it has become clear to me that Steve Brunner has, without explicitly lying, carefully crafted a highly misleading and deceptive picture of the likely return on investment from purchasing TATF trees.
A1
Dear fawtsc;
Your calculations are very interesting. I assume you're using TATF's current prices to calculate your rates of return?
Also, has TATF provided you with any information about the size and projected thinning dates of your trees?
Thanks,
A1
Dear fawtsc;
I appreciate your work on this. It's interesting to note that, in post 108, I calculated an IRR of 6.9% on a purchase of 100 teak seedlings from TATF, using their 2008 pricing. This is in between what you calculated for jatoba and purpleheart. These rates of return are far below what TATF has projected for teak. All of the calculations assume that the tree farm owner is honest and competent, which are highly questionable assumptions with TATF.
A1
Dear Just;
I'm sure I speak for many on this board when I thank you for sharing your experience with TATF. I'm a little confused about your reference to 44 trees thinned. From TATF's website, I thought they would thin 25 trees (per 100 seedlings purchased) at the 7 year thinning. If the 735 BF comes from 25 trees, the numbers work out about right (735/25 = 29.4).
Did TATF actually thin 44 out of 100 trees at the 7 year thinning? Were these all teak trees, or a mix of teak and other trees?
Thanks,
A1
Dear happiesttreeowner;
You wrote:
'Personally, I have found everyone at TATF/Raleo as exemplifying "open and honest."'
I have to say you're in a distinct minority on this board.
You wrote
"The projected 11k+ board feet will be in large part graded FEQ and can be sold in the import/export market upon simply milling and drying."
Can you provide any justification for the statement that the "11k+ board feet will be in large part graded FEQ"? How can you or anyone possibly know that, since none of TATF's trees are older than 16 years old, and none of TATF's lumber has, as of yet, been sold in the open market?
In post 108, I based my estimate on the value of the TATF's teak lumber from the 17, 21, and 25 year old trees from teak prices offered by Premium Woods in Ecuador. Their pricing for teak lumber from trees 20 years or older is $1.89 per board foot for grade C,(60% heartwood/40% sapwood) $2.59 per board foot for grade B (80% heartwood/20% sapwood), and $3.30 per board foot for grade A (100% heartwood). These numbers are far below the price for FEQ teak, which currently stands at over $10/board foot. You may or may not be aware that teak from Central and South America is commands a far lower price than does teak from Asia. In the following link, the price of teak logs from Myanmar (AKA Burma) is listed as 6.5 times the price of similar sized teak logs from Panama (as of Dec, 2007).
http://www.itto.or.jp/live/Live_Server/3751/mis20071201.pdf
(registration will be required).
Happiesttreeowner, I sincerely hope that you're not counting on the distributions from TATF being anywhere near as large as what is projected in their projections table. If you are, you are bound to be sorely disappointed. Until then, you can continue to live blissfully in your fool's paradise.
A1
Dear happiesttreeowner;
How's this for a promise that TATF hasn't kept?
"Honesty. We will be open and honest with everyone, in everything we do"
http://www.tatf.com/htm/main/our_commitment.htm
Any reasonable person who has read the posts of unhappy tree owners and Steve Brunner's responses to them on this board can see that he has not kept his promise to be open and honest.
Furthermore, his continued publication of projections of proceeds from an investment in TATF teak seedlings http://www.tatf.com/projections.htm that is far in excess of what existing owners have received is also exceedingly dishonest.
Because of TATF's and Steve Brunner's lack of openness and honesty, the TATF projections from which you derived your 11.6% number are worthless.
A1
Dear happiesttreeowner;
I didn't miss your point at all. It seemed to me that you were disingenuously trying to understate the importance of the initial distributions from an investment in TATF. I responded by showing how much removing the initial 3 distributions from the projections for returns from an investment in TATF teak seedlings would affect the internal rate of return from such an investment.
I think you missed (or refused to acknowledge) my main point, so I'll repeat it here:
The key fallacy in your post (#226) is your assumption that, after vastly underperforming to its projections for so long, TATF will, from now on, do what it has promised.
A1
Happiest Tree Owner;
You stated:
"the first 3 thinnings/harvests are projected to return only 11.6% of the projected total net return."
Actually, when the distributions from the first 3 thinnings are removed from the projections, the internal rate of return drops from about 19% to about 15.5%. This is a drop of 18.4%, not 11.6%.
However, the key fallacy in your post is your assumption that, after vastly underperforming to its projections for so long, TATF will, from now on, do what it has promised.
A1
Who's telling the truth?
In post #83 on this board, Steve Brunner wrote:
"Dean, you make the statement that “The actual return seen by investors in TATF has been far below the returns projected by Steve on TATF's website, but he does not post any numbers on the actual returns” and “It's exceedingly dishonest to continue to project returns that are far higher than those seen by prior investors in TATF.”
Both statements are simply not true. Our first-thinning teak distributions equal $1,623 per original 100 teak trees, which is actually a tiny bit above our projections."
Lbl in post #81 on this board wrote:
"This post goes out to Steve Brunner and to belmontx inpost #78.I am that person who had their trees cut in 2001.I have been waiting to see my thinning distribution for almost 8 years now."
In the tropical tree investment forum, fzapp writes:
"I have been a TATF tree owner since 1995 and I have 1993 teak trees. They were thinned in 2001 and I am still have not received any proceeds from the trees.They keep telling me that it will be later this year but I have heard that the last 4 years."
http://tropicaltreeinvestmentforum.com/index.php?topic=3.0
In the same forum, 356A writes:
"My 1996 trees were to have been thinned for the first time in '03 -'04, I did not receive the thinning report until the end of November '06, and was informed that it could be a number of years before cash was available to pay disbursments. The second thinning should have happened in '06 -'07, yet I have not received any news to date. I have been suprised that there has not been a ground swell of protests..."
In the home discussion forum, findlay writes about TATF:
"They haven't paid me what they put in their projections. Nor anything, for that matter, and the time has been way beyond what I was told. The office only gives continuous excuses."
http://www.homediscussion.com/showthread.php?t=155849&page=2&highlight=tatf
In the same forum, Joe writes:
"I haven't gotten anything back from my trees, even tho I bought them a long time ago. None of the things they said on their predictions have happened. The office just keeps saying I'll get paid later, but they've told me that for five years."
So who's telling the truth?
You be the judge.
A1
Dear Fawtsc;
If you believe TATF and/or Steve Brunner has behaved in a dishonest or deceptive manner, I encourage you to file a complaint with the appropriate law enforcement agency in your country. You may also wish to read post #186 for some other actions you can take.
A1
An interesting paper.
I found an interesting paper about the results of a number of teak investment funds, written by some Dutch researchers. As can be seen by reading the paper, many of these funds have gone bankrupt.
A quote:
'We show that investments in timber funds are very risky, due to e.g. their illiquidity, weak regulation, and the high degree of uncertainty in their project management.'
A1
http://www.rug.nl/staff/l.spierdijk/ATT00106.pdf?as=pdf
Dear Lbl,
Have your trees received their 10 year and 13 year thinnings?
If so, were the thinnings done on time?
In Steve Brunner's last post (#165), he talked about how he thought 'a decent amount' of the wood from the thinned 13 year old teak trees could be sold directly in the open market. It occurred to me that he should already know how much of the wood from these trees could be sold into the open market, and at what price, since the 1992, 1993, and 1994 teak trees should have received their 13 year thinnings by now. In particular, the 1992 teak should have been thinned almost 3 years ago, and the 1993 teak should have been thinned almost 2 years ago.
Have you received any notices from TATF about the thinning and/or sale of the lumber from the 13 year thinning of your 1993 teak?
Thanks,
A1
Dear lbl;
After reading your post, and re-reading the posts from Happy Tree Owner and JRWYATT24, I have become even more concerned. It appears that the only two posters who've said they're happy with TATF and Steve Brunner are personal friends of his, and therefore cannot be considered objective.
I've always believed that TATF would pay distributions to its investors. As I investigated more, however, it became clear that TATF would pay much less money than it has projected, and much later than it has projected.
Now that you've made it clear how early you invested in TATF, and you still have not been paid anything, I'm beginning to wonder if TATF has or will pay out anything to investors, except perhaps to insiders and personal friends of the Brunners.
A1
Justcfrall;
Actually, girth is circumference, not diameter. So a log with a girth of 35-45 cm girth would have a diameter of 11-14 cm, or 4.5 to 5.5 inches. This is the reason for the low price.
A1
Have you been defrauded by TATF?
In my heart, I believe that TATF's misrepresentations to investors over the years meet the definition of criminal fraud. However, as TATF and Steve Brunner are in Costa Rica, those of us who live outside Costa Rica may find it difficult to recover our money by suing him. A better approach may be to file a complaint with a law enforcement agency. The more TATF investors who take this action, the more likely that TATF will be investigated, which could result in substantial pressure on Steve Brunner to pay restitution to his investors.
If you think TATF has defrauded you, you may want to file a confidential complaint at the Internet Crime Complaint Center http://www.ic3.gov/, or send an e-mail to the Costa Rican embassy
consulate@costarica-embassy.org, or an e-mail directly to the President of Costa Rica http://www.casapres.go.cr/inicioContactenos.aspx.
Or, better yet, do all of the above.
A1
How much has TATF taken in?
Thirty to Thirty-Five Million Dollars
Steve Brunner has stated that TATF has paid out $850,000 to investors since the company started. I thought it would be interesting to estimate how much TATF has taken in from investors over the years. TATF has announced that they've planted over 2 million trees. A conservative estimate of the number of trees bought by investors might be 60% of the total trees planted, or 1.2 million trees purchased. The average current price per tree is around $40 ($4000 per 100 trees in the 500-900 tree quantity bracket). From Steve Brunner's posts, early investors could buy trees for about $1600 per 100 trees, or $16 per tree. This yields a time averaged price per tree of ($40+$16)/2 = $28/tree. Multiplying this number by 1.2 million trees gives $33.6 million dollars.
If this amount of money had been invested at 4% in a savings account, I estimate that the (after-tax) amount earned in interest by now would be $7.5 million ($33.6 million * 8 years * 0.04, less 30% for taxes).
So, thus far, TATF has paid out far less to its investors than they would have been paid by their local bank if they put their money in a savings account.
A1