Now that the investment clarion has been sounded, investors may wish to do their own homework for evaluating candidates for investment. Among the several dozen decent publicly traded companies how does one decide which ones to invest in?
While not an exhaustive list, here are some things every investor ought to keep in mind. Follow these rules, and your chances of getting in trouble will be greatly diminished.
Ask and answer the following questions:
1. Where Are The Operations Located?
In my opinion, the biggest risk currently is geo-political. Some countries are dependent on their mining industries and are not terribly interested in having foreign interests, i.e. us, coming in and pillage their resources for our own profit. The risk is nationalization.
A recent case is that of Crystallex International Corporation (KRY), whose mining interests were nationalized by Venezuela. KRY stock sold for more than $4 per share as recently as 2007, before losing a mind-numbing 98% of value to hit 10 cents per share. It has recovered somewhat to trade at $0.45 today.
Personally, I prefer to stick to North American companies which operate in some combination of Canada, the United States and Mexico. I tend to avoid companies with the bulk of their operations in Africa, whose countries tend to be perpetually unstable and subject to ethnic conflicts and new governments. It's impossible to predict which country in what continent will be unsafe, so I stick to where I believe the business environment will not be subject to change without warning.
2. What Aspect Of Mining Is The Company Involved With?
The junior mining sector is basically divided into explorers, developers and producers. The explorers are like oil wildcatters. They can have the greatest gains and the most severe losses. Some junior explorers to consider are U.S. Gold Corporation (UXG), Explor Resources Inc. (EXSFF) and Vista Gold Corporation (VGZ).
Most explorers wish to develop their projects, but some don't. Vista Gold successfully developed its Nevada-based operations to form Allied Nevada Gold Corp. (ANV), which was later spun-off to shareholders at a tremendous profit.
The key risk to an explorer is that its projects turn out to be not viable economically. NovaGold Resources, Inc. (NG), which has a 50% interest in the Galore Creek project, had to suspend development in late 2007 as cost estimates proved way too low. The stock lost 99% of its value from more than $20 per share to about 25 cents in one year.
3. Is The Company Profitable?
The only companies that can report profits are producers. Some geo-politically safe producers include Aurizon Mines Ltd. (AZK), New Gold Inc. (NGD), ECU Silver Mining Company (ECUXF) and Hecla Mining Company (HL). Each of these is profitable and getting more so, based on recent financial reporting.
Given the very favorable mining economics prevailing today, the list above is far from extensive.
4. Is There An Asset Play?
Some companies are primarily an asset play. They hold already drilled and largely delineated projects. Probably the best asset play out there is Seabridge Gold (SA), which boasts more than 60 million ounces of economically viable Gold, in addition to a slew of other minerals such as Copper.
Producers can also be terrific asset plays. ECU is not only currently producing and profitable, it also boasts what is now the 4th largest resource base of Silver, at a fraction of the market capitalization of high-quality giants such as Silver Wheaton Corp. (SLW) and Pan American Silver Corp. (PAAS).
5. Does The Company Have Sufficient Financial Resources?
Miners who are not generating cash flow are dependent on the capital markets. The financial meltdown of 2008-2009 placed these companies under extreme financial duress. Developing, drilling and exploring is capital-intensive and requires regular infusions.
It's important to note both how much liquid resources a company has and its offsetting debt obligations. If too much debt is coming due and the financial markets are frozen, the company may have to raise additional funds at extremely bad terms. Companies with limited financial resources got particularly bludgeoned in the 2008-2009 meltdown.
6. Is This Company Likely To Acquire Or Be Acquired?
Undoubtedly, as the mining industry starts to boom, there will be a slew of mergers and acquisitions. Any company making an acquisition will typically do a "stock-for-stock" transaction, which will dilute the acquiror while paying a premium to the acquiree.
This is why I tend to avoid the larger companies. To remain competitive, it's more cost-effective to acquire in-ground assets than to go through a long and expensive exploration, drilling and development process. Existing projects have far less risk.
The companies most likely to acquire are primarily the majors such as Newmont Mining Corporation (NEM), Barrick Gold Corp. (ABX), Yamana Gold Inc. (AUY) and Goldcorp. Inc. (GG). Even higher-quality intermediate producers such as IAMGold Corporation (IAG) or Eldorado Gold Corp. (EGO) can be expected to join the acquisition race.
If you hold a company that gets acquired, you receive an instant windfall. While you may be disappointed that the ride to much higher prices has been cut short, you can easily re-deploy the gains you just received in another junior.
Naturally, this is just a brief checklist of the items to look into prior to making a sizable investment. There are many more items to consider such as quality of management and liquidity of the stock. And, a technical review of the stock would also be a very important criteria.
Great fortunes can be made in the next several months for investors who can make good decisions as to the horses they choose to get them to the finish line. Most important is to avoid the big loss. Another obvious factor to incorporate is good diversification. For those investors who are not comfortable with making these choices, an excellent vehicle which includes 40 juniors and intermediates, is the Exchange-Traded Fund GDXJ.
Marko's Take
Showing posts with label Vista Gold Corp.. Show all posts
Showing posts with label Vista Gold Corp.. Show all posts
Tuesday, June 22, 2010
Tuesday, April 27, 2010
Newmont Mining Earnings Kick Off Great Season For Miners
Virtually every precious metals miner reported outstanding earnings for the 4th quarter (http://markostake.blogspot.com/2010/03/major-gold-producers-deliver-stellar.html).
As earnings season resumes, Newmont Mining Corp. (NEM) has given confirmation that exploding earnings are NO fluke. In fact, the precious metals mining sector, on a fundamental basis, is looking downright cheap!
Tuesday morning, NEM said net income attributable to shareholders nearly tripled in the first quarter to $546 million, against $189 million in the year ago period. On a per share basis, the company earned $1.11 in the period against 40 cents a year ago.
The company's adjusted profit was 83 cents per share. A survey of analysts at FactSet Research was estimating earnings of 79 cents a share in the quarter. The company said its average realized gold price rose 22%. The company is maintaing its previously announced 2010 outlook for equity gold production of 5.3 million to 5.5 million ounces and costs applicable to sales of between $450 and $480 an ounce.
The highlights of Newmont's first quarter report included gold production of 1.3 million ounces and copper production of 90 million pounds. Revenues increased to $2.2 billion, up 46% from the similar quarter last year.
According to the company's press release, "With a 22% increase in our average realized gold price, our net gold operating margin expanded by 32% to $626 per ounce, further demonstrating our ability to provide significant gold price leverage through expanding cash operating margins," said Richard O'Brien, President and Chief Executive Officer. "We also recently secured the mining lease for our Akyem project in Ghana and continue our dialogue with local communities and Ghanaian authorities. In addition, we are advancing our development plans at Conga in Peru following a successful public meeting with local stakeholders. The strength of our balance sheet coupled with the progress being made on our advanced development assets, Newmont is well positioned to invest in our project pipeline while maintaining our financial strength and flexibility."
A missing element in prior rallies in the precious metals sector has been earnings growth, despite the large increase in Gold prices. In large part this was the result of skyrocketing oil prices - a major cost element. With energy prices hovering in the $80 per barrel range, while GOLD tests its all time highs, costs of production are easier to keep under control while revenues are shooting up with higher realized commodity prices.
Another important factor has been the unwinding of hedge books - something that nearly every major producer has either completed or is in the process of completing. Poorly implemented hedges had reduced the major Gold Producer's benefit from rising metal prices and created significant derivative losses. Now that the hedges are no longer putting a drag on revenues realized, the sector is poised to continue rapid earnings growth.
The technicals for the sector also look fantastic. The dollar has been sputtering after a blistering rally early in the year. In addition, the Federal Reserve's desperate attempts to keep the economy liquid are showing up in increasing inflation (http://markostake.blogspot.com/2010/04/producer-prices-producing-signs-of.html).
All systems are go. The time for the hyperbolic growth phase is here. Recently, we have written up some suggestions for some excellent junior mining companies that ought to be considered for those wishing to build a portfolio of promising positions. Our reports on Aurizon Mines (AZK), Explor Resources (EXSFF), Vista Gold (VGZ), Tara Minerals (TARM), Samex Mining (SMXMF), Seabridge Gold (SA), Hecla Mining (HL) and ECU Silver Mining (ECUXF) can be accessed by clicking the links below:
http://markostake.blogspot.com/2010/04/risin-aurizon-mines.html
http://markostake.blogspot.com/2010/04/exploring-explor-resources.html
http://markostake.blogspot.com/2010/03/vista-gold-explorer-worth-exploring.html
http://markostake.blogspot.com/2010/03/tara-minerals-on-tear.html
http://markostake.blogspot.com/2010/03/samex-mining-grand-slam-ex.html
http://markostake.blogspot.com/2010/03/seabridge-gold-how-to-buy-gold-for.html
http://markostake.blogspot.com/2010/03/hecla-mining-at-119-years-old-producing.html
http://markostake.blogspot.com/2010/02/ecu-silver-mining-as-good-as-it-gets_7745.html
Marko's Take
Please visit our new You Tube channel at http://youtube.com/markostaketv. Our latest video on the Legality Of The Personal Income Tax can be accessed at (http://www.youtube.com/markostaketv#p/u/0/1TInKnCIikg). Our next video on Social Security, which will be a two part series, is in post production and will be posted shortly.
If you have any interest in how to receive 3D content on your mobile phone, please access our new website at (http://www.e3dlabs.com/). Contact me for further information.
As earnings season resumes, Newmont Mining Corp. (NEM) has given confirmation that exploding earnings are NO fluke. In fact, the precious metals mining sector, on a fundamental basis, is looking downright cheap!
Tuesday morning, NEM said net income attributable to shareholders nearly tripled in the first quarter to $546 million, against $189 million in the year ago period. On a per share basis, the company earned $1.11 in the period against 40 cents a year ago.
The company's adjusted profit was 83 cents per share. A survey of analysts at FactSet Research was estimating earnings of 79 cents a share in the quarter. The company said its average realized gold price rose 22%. The company is maintaing its previously announced 2010 outlook for equity gold production of 5.3 million to 5.5 million ounces and costs applicable to sales of between $450 and $480 an ounce.
The highlights of Newmont's first quarter report included gold production of 1.3 million ounces and copper production of 90 million pounds. Revenues increased to $2.2 billion, up 46% from the similar quarter last year.
According to the company's press release, "With a 22% increase in our average realized gold price, our net gold operating margin expanded by 32% to $626 per ounce, further demonstrating our ability to provide significant gold price leverage through expanding cash operating margins," said Richard O'Brien, President and Chief Executive Officer. "We also recently secured the mining lease for our Akyem project in Ghana and continue our dialogue with local communities and Ghanaian authorities. In addition, we are advancing our development plans at Conga in Peru following a successful public meeting with local stakeholders. The strength of our balance sheet coupled with the progress being made on our advanced development assets, Newmont is well positioned to invest in our project pipeline while maintaining our financial strength and flexibility."
A missing element in prior rallies in the precious metals sector has been earnings growth, despite the large increase in Gold prices. In large part this was the result of skyrocketing oil prices - a major cost element. With energy prices hovering in the $80 per barrel range, while GOLD tests its all time highs, costs of production are easier to keep under control while revenues are shooting up with higher realized commodity prices.
Another important factor has been the unwinding of hedge books - something that nearly every major producer has either completed or is in the process of completing. Poorly implemented hedges had reduced the major Gold Producer's benefit from rising metal prices and created significant derivative losses. Now that the hedges are no longer putting a drag on revenues realized, the sector is poised to continue rapid earnings growth.
The technicals for the sector also look fantastic. The dollar has been sputtering after a blistering rally early in the year. In addition, the Federal Reserve's desperate attempts to keep the economy liquid are showing up in increasing inflation (http://markostake.blogspot.com/2010/04/producer-prices-producing-signs-of.html).
All systems are go. The time for the hyperbolic growth phase is here. Recently, we have written up some suggestions for some excellent junior mining companies that ought to be considered for those wishing to build a portfolio of promising positions. Our reports on Aurizon Mines (AZK), Explor Resources (EXSFF), Vista Gold (VGZ), Tara Minerals (TARM), Samex Mining (SMXMF), Seabridge Gold (SA), Hecla Mining (HL) and ECU Silver Mining (ECUXF) can be accessed by clicking the links below:
http://markostake.blogspot.com/2010/04/risin-aurizon-mines.html
http://markostake.blogspot.com/2010/04/exploring-explor-resources.html
http://markostake.blogspot.com/2010/03/vista-gold-explorer-worth-exploring.html
http://markostake.blogspot.com/2010/03/tara-minerals-on-tear.html
http://markostake.blogspot.com/2010/03/samex-mining-grand-slam-ex.html
http://markostake.blogspot.com/2010/03/seabridge-gold-how-to-buy-gold-for.html
http://markostake.blogspot.com/2010/03/hecla-mining-at-119-years-old-producing.html
http://markostake.blogspot.com/2010/02/ecu-silver-mining-as-good-as-it-gets_7745.html
Marko's Take
Please visit our new You Tube channel at http://youtube.com/markostaketv. Our latest video on the Legality Of The Personal Income Tax can be accessed at (http://www.youtube.com/markostaketv#p/u/0/1TInKnCIikg). Our next video on Social Security, which will be a two part series, is in post production and will be posted shortly.
If you have any interest in how to receive 3D content on your mobile phone, please access our new website at (http://www.e3dlabs.com/). Contact me for further information.
Monday, April 5, 2010
Gold Market Pulls Double-Reverse: Time To Re-Enter
Not long ago, the Gold and precious metals market looked ready to surprise some of us Gold Bulls and do a face plant into the concrete. Just as things started to look dicey, we got faked-out and called for a move into cash (http://markostake.blogspot.com/2010/03/gold-market-update-time-to-go-to-cash.html).
Now it looks like Gold has pulled off a stunningly successful "double-reverse". For those not familiar with football parlance, a double-reverse is a manoeuver designed to switch directions twice in one play. First, the play has you looking right, then left, then right again. If you don't know its coming, you get faked out of your shoes.
And so it appears with Gold and Precious Metals stocks. Just as it looked like we would get a completely surprising market reversal to the downside, the market held, gathered strength and now all signs point to a renewal of the upside hyperbolic mania that we were looking for all along.
All the market did was what it was SUPPOSED to do. Like an illusionist, it diverted our attention while it pulled of its seemingly amazing trick.
The GOOD news is that re-entry here with Gold near the $1,125-$1,130 level leaves PLENTY of upside, especially if our longer-term projection of $5,000 is met. The important thing is not to fall in love with either a market outlook or individual postions and stay with the "weight of the evidence". That evidence now is screaming BUY again.
Especially telling was the sudden surge in the Gold Bugs index on Thursday, also known as the HUI. The HUI surged a whopping 5% indicating an investor stampede back into precious metals stocks. In additon, some key chart patterns were resolved in a bullish manner. Can't fight the tape!
So, now that the market has successfully faked us out, it's time to re-enter. We did a series, a couple of weeks back on a number of promising stocks and we would suggest a review of these if you're interested in selecting some appropriate candidates. The links are provided below.
The individual stock reviews of Vista Gold, Tara Minerals, Samex Mining, Seabridge Gold, Hecla Mining, and ECU Silver Mining can be accessed by clicking on the following links:
(http://markostake.blogspot.com/2010/03/vista-gold-explorer-worth-exploring.html)
(http://markostake.blogspot.com/2010/03/tara-minerals-on-tear.html)
(http://markostake.blogspot.com/2010/03/samex-mining-grand-slam-ex.html)
(http://markostake.blogspot.com/2010/03/seabridge-gold-how-to-buy-gold-for.html)
(http://markostake.blogspot.com/2010/03/hecla-mining-at-119-years-old-producing.html)
(http://markostake.blogspot.com/2010/02/ecu-silver-mining-as-good-as-it-gets_7745.html)
(http://markostake.blogspot.com/2010/03/major-gold-producers-deliver-stellar.html)
In the days ahead, we'll cover more individual stocks of interest.
For now, ignore last week's man behind the curtain, and listen to THIS WEEK'S man behind the curtain!
There's a great opportunity looming ahead of us and lot's of time to board the train and enjoy a great ride.
Marko's Take
Please visit our new YouTube channel at http://www.youtube.com/markostaketv.
Now it looks like Gold has pulled off a stunningly successful "double-reverse". For those not familiar with football parlance, a double-reverse is a manoeuver designed to switch directions twice in one play. First, the play has you looking right, then left, then right again. If you don't know its coming, you get faked out of your shoes.
And so it appears with Gold and Precious Metals stocks. Just as it looked like we would get a completely surprising market reversal to the downside, the market held, gathered strength and now all signs point to a renewal of the upside hyperbolic mania that we were looking for all along.
All the market did was what it was SUPPOSED to do. Like an illusionist, it diverted our attention while it pulled of its seemingly amazing trick.
The GOOD news is that re-entry here with Gold near the $1,125-$1,130 level leaves PLENTY of upside, especially if our longer-term projection of $5,000 is met. The important thing is not to fall in love with either a market outlook or individual postions and stay with the "weight of the evidence". That evidence now is screaming BUY again.
Especially telling was the sudden surge in the Gold Bugs index on Thursday, also known as the HUI. The HUI surged a whopping 5% indicating an investor stampede back into precious metals stocks. In additon, some key chart patterns were resolved in a bullish manner. Can't fight the tape!
So, now that the market has successfully faked us out, it's time to re-enter. We did a series, a couple of weeks back on a number of promising stocks and we would suggest a review of these if you're interested in selecting some appropriate candidates. The links are provided below.
The individual stock reviews of Vista Gold, Tara Minerals, Samex Mining, Seabridge Gold, Hecla Mining, and ECU Silver Mining can be accessed by clicking on the following links:
(http://markostake.blogspot.com/2010/03/vista-gold-explorer-worth-exploring.html)
(http://markostake.blogspot.com/2010/03/tara-minerals-on-tear.html)
(http://markostake.blogspot.com/2010/03/samex-mining-grand-slam-ex.html)
(http://markostake.blogspot.com/2010/03/seabridge-gold-how-to-buy-gold-for.html)
(http://markostake.blogspot.com/2010/03/hecla-mining-at-119-years-old-producing.html)
(http://markostake.blogspot.com/2010/02/ecu-silver-mining-as-good-as-it-gets_7745.html)
(http://markostake.blogspot.com/2010/03/major-gold-producers-deliver-stellar.html)
In the days ahead, we'll cover more individual stocks of interest.
For now, ignore last week's man behind the curtain, and listen to THIS WEEK'S man behind the curtain!
There's a great opportunity looming ahead of us and lot's of time to board the train and enjoy a great ride.
Marko's Take
Please visit our new YouTube channel at http://www.youtube.com/markostaketv.
Friday, March 19, 2010
Vista Gold: An Explorer Worth Exploring
We continue our series of interesting junior precious metals companies for investors to consider.
Vista Gold Corp. (VGZ) is an international gold mining company based in Littleton, Colorado, with a 20-year history of Gold exploration, development and operations.
Vista has positioned the company to benefit from higher Gold prices and has acquired a number of impressive gold projects from 2001 to 2006. During 2006 and 2007, Vista completed transactions that resulted in the formation and successful spin-off to its shareholders of Allied Nevada Gold Corp. (ANV).
Since the spin-off, Vista has sold one project and currently holds six projects with an estimated 1.3 million ounces of proven and probable reserves, 12.8 million ounces of measured and indicated resources and 4.6 million ounces inferred. Vista has undertaken programs to advance the Paredones Amarillos gold project, located in Baja California Sur, Mexico, including a definitive feasibility study, the purchase of long delivery equipment items and the purchase of land for the processing facilities, related infrastructure and the desalination plant.
The results of a Preliminary Economic Assessment completed in 2009 on the Mt. Todd gold project in Australia are encouraging and Vista is undertaking other studies to advance the project. Vista's other holdings include the Yellow Pine gold project in Idaho, Guadalupe de los Reyes gold project in Mexico, Long Valley gold project in California and Awak Mas gold project in Indonesia.
The spin-off of intermediate-producer Allied Nevada has proven to be a huge home run to shareholders. ANV, which produces Gold in Nevada, has a market capitalization of more than $1 billion, as opposed to micro-cap Vista, which at current prices, has a market capitalization of UNDER $100 million!
Fellow explorer Seabridge Gold, recently featured on Marko's Take, (http://markostake.blogspot.com/2010/03/seabridge-gold-how-to-buy-gold-for.html) has yet to successfully see a project advanced to the production stage with the unbridled sucess of the Allied-Nevada spin-off.
As an explorer, Vista's earnings are fairly meaningless. More important, by far, is Vista's track record, longevity, management and financial situation.
Vista recently released full-year results. A quick review of the balance sheet reveals plenty of cash and liquid resources totalling approximately $30 million, or one-third of the Company's entire market capitalization. Offsetting that somewhat is long-term debt of about $25 million, principally in the form of convertible notes.
The convertible notes are currently "out of the money" with a strike price of $4.80 per share. The Company has been able to repurchase some of the notes in privately arranged transactions.
In September 2009, Vista successfully sold 10.3 million shares for $2.25 per share - realizing proceeds of $20.3 million, bolstering the balance sheet and providing additional liquidity to fund its ongoing exploration and development.
In the interest of full disclosure, I personally own shares of Vista Gold.
Vista was recently recommended by the excellent technician Clive Maund (http://clivemaund.com/).
Happy Investing!
Marko's Take
Other investing sites of merit that we recommend: LeMetropole Cafe (http://lemetropolecafe.com/) and StockMavrick (http://stockmavrck.com/) and Global Green Forex LLC (http://www.globalgreenforex.com/), a money management firm specializing in foreign exchange trading.
Check out our YouTube channel at (http://www.youtube.com/markostaketv).
Vista Gold Corp. (VGZ) is an international gold mining company based in Littleton, Colorado, with a 20-year history of Gold exploration, development and operations.
Vista has positioned the company to benefit from higher Gold prices and has acquired a number of impressive gold projects from 2001 to 2006. During 2006 and 2007, Vista completed transactions that resulted in the formation and successful spin-off to its shareholders of Allied Nevada Gold Corp. (ANV).
Since the spin-off, Vista has sold one project and currently holds six projects with an estimated 1.3 million ounces of proven and probable reserves, 12.8 million ounces of measured and indicated resources and 4.6 million ounces inferred. Vista has undertaken programs to advance the Paredones Amarillos gold project, located in Baja California Sur, Mexico, including a definitive feasibility study, the purchase of long delivery equipment items and the purchase of land for the processing facilities, related infrastructure and the desalination plant.
The results of a Preliminary Economic Assessment completed in 2009 on the Mt. Todd gold project in Australia are encouraging and Vista is undertaking other studies to advance the project. Vista's other holdings include the Yellow Pine gold project in Idaho, Guadalupe de los Reyes gold project in Mexico, Long Valley gold project in California and Awak Mas gold project in Indonesia.
The spin-off of intermediate-producer Allied Nevada has proven to be a huge home run to shareholders. ANV, which produces Gold in Nevada, has a market capitalization of more than $1 billion, as opposed to micro-cap Vista, which at current prices, has a market capitalization of UNDER $100 million!
Fellow explorer Seabridge Gold, recently featured on Marko's Take, (http://markostake.blogspot.com/2010/03/seabridge-gold-how-to-buy-gold-for.html) has yet to successfully see a project advanced to the production stage with the unbridled sucess of the Allied-Nevada spin-off.
As an explorer, Vista's earnings are fairly meaningless. More important, by far, is Vista's track record, longevity, management and financial situation.
Vista recently released full-year results. A quick review of the balance sheet reveals plenty of cash and liquid resources totalling approximately $30 million, or one-third of the Company's entire market capitalization. Offsetting that somewhat is long-term debt of about $25 million, principally in the form of convertible notes.
The convertible notes are currently "out of the money" with a strike price of $4.80 per share. The Company has been able to repurchase some of the notes in privately arranged transactions.
In September 2009, Vista successfully sold 10.3 million shares for $2.25 per share - realizing proceeds of $20.3 million, bolstering the balance sheet and providing additional liquidity to fund its ongoing exploration and development.
In the interest of full disclosure, I personally own shares of Vista Gold.
Vista was recently recommended by the excellent technician Clive Maund (http://clivemaund.com/).
Happy Investing!
Marko's Take
Other investing sites of merit that we recommend: LeMetropole Cafe (http://lemetropolecafe.com/) and StockMavrick (http://stockmavrck.com/) and Global Green Forex LLC (http://www.globalgreenforex.com/), a money management firm specializing in foreign exchange trading.
Check out our YouTube channel at (http://www.youtube.com/markostaketv).
Wednesday, March 17, 2010
Samex Mining: A Grand "Slam" Ex?
We are getting ever so close to the final precious metals launch into the stratosphere. In fact, we believe that yesterday's $20 rise in the price of Gold will prove to be the "foreshock" to the earthquake ready to rattle investors. With that in mind, we're continuing our series on promising junior mining companies.
Today's featured company is a very speculative play called Samex Mining (SMXMF-OTCBB or SXG.V). This company was first brought to my attention, as was ECU Silver Mining, (http://markostake.blogspot.com/2010/02/ecu-silver-mining-as-good-as-it-gets_7745.html) by Bill Murphy's must-read LeMetropole (http://www.lemetropolecafe.com/).
But if you're not a reader of LeMetropole, which you should be, you may not know about this incredibly promising company.
Samex is an explorer, which is different than a miner in that explorers chiefly find promising deposits. How they dispose of those finds can vary. Some like Vista Gold Corp. (VGZ) have spun-off projects to shareholders. Vista spun-off a company called Allied-Nevada Gold Corp. (ANV), which is a first-class producer in, where else, Nevada!
Samex explores the Andean Cordillera of Chile for rich deposits of gold, silver and copper. This area is one of the most bountifully mineralized regions on Earth, where many of the globe's largest deposits have been discovered.
Normally, I tend to avoid companies that operate in areas that may be considered geo-politically risky. Just ask the shareholders of Crystallex (KRY), who had their fabulous Venezuelan deposits expropriated by Hugo Chavez. KRY sold for more than $5 per share in 2007, now languishing at about $.30 and is engaged in a war of words with the Venezuelan Government. It would a shareholder want to "kry"!
Chile is no Venezuela and is known for mining friendliness. Since the 1990’s, Chile has been the first port of call in terms of investing in South America and, as a result, numerous foreign companies have developed the country’s burgeoning mining sector. Chile is recognized as the mining capital of Latin America and can be credited with initiating the investment surge to make Latin America the world’s primary mineral target.
As an explorer, earnings as a barometer of value are entirely irrelevant. The value is highly qualitative - more a function of the quality of managment, properties owned and the company's ability to maintain funding as it completes its program.
Samex has been steadily reporting rich finds. The company's latest press release elaborates (http://www.samex.com/news/aa-news-2010/NR1-10-Jan21.pdf).
While Samex is not particularly well capitalized, it was able to realize proceeds of nearly $1.2 million in a warrant offering in November, 2009. Thus, the company, despite its very low stock price of about $.30 is still able to access capital markets.
Anyone considering investing in Samex has got to look at it as a high risk/potential high return proposition. This company is not for the feint of heart - as is ANY explorer.
For disclosure purposes, I am an owner of Samex shares and believe that the high potential rewards MORE than justify the risk. I would NOT recommend it to anyone... just those who are looking for an excellent roll of the dice and perhaps some diversification in a portfolio of juniors. I would NOT place Samex as a core holding as I might view either Seabridge Gold (http://markostake.blogspot.com/2010/03/seabridge-gold-how-to-buy-gold-for.html) or Hecla Mining (http://markostake.blogspot.com/2010/03/hecla-mining-at-119-years-old-producing.html).
Finally, I want to thank our new partners at "Stock Maverick" (http://www.stockmavrick.com/), a fabulous website for penny stocks like Samex, although with a broader mandate to cover promising companies in sectors not just limited to commodities and natural resources, as we are at "Marko's Take". Check it out for some excellent ideas!
Happy investing!
Marko's Take
For new readers, we also have a YouTube channel, which is more oriented toward World Events and Politics, as opposed to pure investment issues. It can be accessed here: http://www.youtube.com/markostaketv. We will be filming 5 new segments this coming Saturday and start releasing them on a weekly basis, along with our partner, Phoenix Film Group, http://www.youtube.com/phoenixfilmgroup.
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Today's featured company is a very speculative play called Samex Mining (SMXMF-OTCBB or SXG.V). This company was first brought to my attention, as was ECU Silver Mining, (http://markostake.blogspot.com/2010/02/ecu-silver-mining-as-good-as-it-gets_7745.html) by Bill Murphy's must-read LeMetropole (http://www.lemetropolecafe.com/).
But if you're not a reader of LeMetropole, which you should be, you may not know about this incredibly promising company.
Samex is an explorer, which is different than a miner in that explorers chiefly find promising deposits. How they dispose of those finds can vary. Some like Vista Gold Corp. (VGZ) have spun-off projects to shareholders. Vista spun-off a company called Allied-Nevada Gold Corp. (ANV), which is a first-class producer in, where else, Nevada!
Samex explores the Andean Cordillera of Chile for rich deposits of gold, silver and copper. This area is one of the most bountifully mineralized regions on Earth, where many of the globe's largest deposits have been discovered.
Normally, I tend to avoid companies that operate in areas that may be considered geo-politically risky. Just ask the shareholders of Crystallex (KRY), who had their fabulous Venezuelan deposits expropriated by Hugo Chavez. KRY sold for more than $5 per share in 2007, now languishing at about $.30 and is engaged in a war of words with the Venezuelan Government. It would a shareholder want to "kry"!
Chile is no Venezuela and is known for mining friendliness. Since the 1990’s, Chile has been the first port of call in terms of investing in South America and, as a result, numerous foreign companies have developed the country’s burgeoning mining sector. Chile is recognized as the mining capital of Latin America and can be credited with initiating the investment surge to make Latin America the world’s primary mineral target.
As an explorer, earnings as a barometer of value are entirely irrelevant. The value is highly qualitative - more a function of the quality of managment, properties owned and the company's ability to maintain funding as it completes its program.
Samex has been steadily reporting rich finds. The company's latest press release elaborates (http://www.samex.com/news/aa-news-2010/NR1-10-Jan21.pdf).
While Samex is not particularly well capitalized, it was able to realize proceeds of nearly $1.2 million in a warrant offering in November, 2009. Thus, the company, despite its very low stock price of about $.30 is still able to access capital markets.
Anyone considering investing in Samex has got to look at it as a high risk/potential high return proposition. This company is not for the feint of heart - as is ANY explorer.
For disclosure purposes, I am an owner of Samex shares and believe that the high potential rewards MORE than justify the risk. I would NOT recommend it to anyone... just those who are looking for an excellent roll of the dice and perhaps some diversification in a portfolio of juniors. I would NOT place Samex as a core holding as I might view either Seabridge Gold (http://markostake.blogspot.com/2010/03/seabridge-gold-how-to-buy-gold-for.html) or Hecla Mining (http://markostake.blogspot.com/2010/03/hecla-mining-at-119-years-old-producing.html).
Finally, I want to thank our new partners at "Stock Maverick" (http://www.stockmavrick.com/), a fabulous website for penny stocks like Samex, although with a broader mandate to cover promising companies in sectors not just limited to commodities and natural resources, as we are at "Marko's Take". Check it out for some excellent ideas!
Happy investing!
Marko's Take
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