Good News For The Sandstorm Siblings [View article]
One downside from the equity issuance is that it may be used to buy back half the palladium stream as it will only cost 9.75m. Not that this will be done soon but my guess is that it will occure before the PGM flotation circuit is up and running as palladium production will only range to between 10-15k oz.s prior to that, then increasing to between 75-80k oz.s (using consensus analyst estimates).
There are reasons to be bullish regarding Sandstorm M&E's near term deal flow. They have been looking to acquire a Zinc stream ( as some of the largest mines in the world shutdown including the Century Mine, Lisheen, Brunswick, Persavearance, Skorpion which which will take 1.35m tons off-line in addition to numerous smaller ops going offline. This plus all the contractions of zinc production at mines such as Red dog, San Cristobal, La Ronde and plenty more. In 2014 oat of the surplus will be gone, going into a deficit in 2015 and by 2017 the deficit will grow to 900,000 tons, continuing to grow until at least 2020. Reason being is that there have been no large zinc mines discovered.) I think it would be smart to acquire a stream on one of Trevalis assets but who knows.
Sandstorm will fund this through the sale of a $10m debenture originally from NovaDx, and likely get 2-4m for it plus the 3.26m in cash received from Anterra, sale of equipment from Terrex, worth 3m, so I'll assume they get 2m for it and a $4m debenture from Anterra, which I'll assume they get 2m for it and the sale of of shares it owns of Thunderbird and Donner, worth 1.25m as of today. I used conservative estimates because we never know what will happen.the total comes out to 8.25m. Following the reverse split and only 33m shares outstanding, they will likely issue 4-7m shares raising anywhere from 12-22m. Sandstorm also has roughly 5m in cash, 1-2 of which they'd be willing to spend. So I aggregate ,following the asset sales and equity offering, cash to acquire new streams would be in excess of 26m.
True All-In Costs Of Production: Complete Gold Industry List [View article]
Sorry for the confusion but I meant to say taxes, G&A etc should be in the calculation. When I wrote -cogs-G&A-taxes-int exp-finance cost -sustaining capital I meant one you deduct all these thing from revenue. Also by removing depreciation your not removing sustaining capital costs nor new capital investment such as in machinery, equipment, etc. the depreciation is from capital costs spent to build the mine in the past. So I guess you could include those costs in your calculation but mines more often than not increase the initial mine life several times throughout the LOM. So what I, saying is how can calculate the cost per oz. when one doesn't know how much at least initially the mine can produce. Depletion is also another rather significant non cash charge which should not be included in the cash costs calculation. I also noticed above you convert anything to AuEq but that can vary greatly for example if a base metal, lets say copper goes from 3.5 while gold drops from 1625 ( like it was in q1) down to 1380 or so. You will report far more AuEq, especially if the operator produces significant by products.bb
True All-In Costs Of Production: Complete Gold Industry List [View article]
Sorry for the confusion but I meant to say taxes, G&A etc should be in the calculation. When I wrote -cogs-G&A-taxes-int exp-finance cost -sustaining capital I meant one you deduct all these thing from revenue. Also by removing depreciation your not removing sustaining capital costs nor new capital investment such as in machinery, equipment, etc. the depreciation is from capital costs spent to build the mine in the past. So I guess you could include those costs in your calculation but mines more often than not increase the initial mine life several times throughout the LOM. So what I, saying is how can calculate the cost per oz. when one doesn't know how much at least initially the mine can produce. Depletion is also another rather significant non cash charge which should not be included in the cash costs calculation. I also noticed above you convert anything to AuEq but that can vary greatly for example if a base metal, lets say copper goes from 3.5 while gold drops from 1625 ( like it was in q1) down to 1380 or so. You will report far more AuEq, especially if the operator produces significant by products.
True All-In Costs Of Production: Complete Gold Industry List [View article]
I read your previous article talking about how you calculate the all in cash cost and I believe your missing some things. It goes as follows revenues - net income = costs. It should be revenues - ( COGS - G&A - interest expense - finance related costs - any royalties they may have - taxes - sustaining capital - off balance sheet items such as pension payments or the like which have to be paid as it will describe (broken down by obligation of less than 1 year, those payable in 1-3 years and those payable in 4-5 years. The same goes for operating leases and the like and finally off balance debt which is broken down the same as the others I.e how much debt repayment is due each yr). Depreciation should not be included because it is a non cash charge as it says nothing about the state of the mine or operation. Instead management like as high a depreciation level as possible, serving as a tax shield. Exploration is also up for debate as all in cash per ounce should be measured as those costs which focus on all the costs that have to do with mining. Exploration on those mines should be accounted for and therefore deducted but those costs having to do with a new mine or potential new mine shouldn't be included. I say this because company's can easily cut exploration costs when gold prices get closer to the cost of production such as today's gold price.
Buying Opportunity For Silver Wheaton [View article]
Are you familiar with the company? It latest deal were NOT done in 2009, rather late 2012 and early 2013 in which they completed the largest deal to date with Vale. Between the latest deals with Hudbay (777, Constancia) and Vale (Sudbury & Salobo), they spent a whopping 2.65B in a very short period of time.
Buy These Silver Miners At Fire Sale Prices [View article]
Currently Aurcana is at 70c with a $315m market cap and 567m shared F/D. Assume they do a 1:5 reverse split, this would lead to a $3.50 stock price with 113m shares out on a fully diluted basis and the same $315m market cap. The assume it performs well at goes to $7/share, giving it a $630 market cap. In order to double it had increase its market cap $315m.
Now lets go back and assuming Aurcana is still trading at 70c but it only 200m shares outstanding FD. Lets assume this also undergoes a 1:5 reverse split. This would cause Aurcana again to be at $3.50 with just 40m share outstanding. Now what happens to stock price if it were to also appreciate to $630m market cap? The shares would have to appreciate to $15.75 to achieve the same market capitalization. Make Sense?
I think it is and I don't blame the market for doing so. This would be a much different situation if Sandstorm was no longer pursuiing aggressive growth but because it is still in the abnormal growth phase and will remain there for a few more years, I look at that $50m they spent as a waste of money and really nothing more than a lottery ticket. I would have rather had them use that capital to say convert Mt. Hamilton or Coringa into a stream, which they didn;t do because they were too early stage at the time they acquired the royalties.
As for Sand, I don't expect a great outta the stock, barring a bug rally in gold due to its attributable growth slowing down year over year. It will, however, kick back into high gear in 2014 as Deflector comes onstream, Serra Pelada contributes a material amount of precious metals, Bachelor Lake is ramped up, Bracemac-Mcleod is ramped up and Aurizona increases production from approx 100k in 2013 to 125k in 2014. Additionally, the St. Elena expansion will be complete, which should increase attributable production from 6k in 2013 to 10-12k in 2014.
Why Sandstorm's Exceptional Value Makes It My Top 2013 Gold Stock [View article]
For SAND investors who want a comprehensive view of its assets and the production estimates from these assets, check out my recent article here : http://seekingalpha.co... The above article also includes a in depth valuation. or check out when I first wrote about Sandstorm when it was just trading at $3.30/share back in Jun 2010: http://seekingalpha.co... It is hard to believe Sandstorm will have another great year in 2013 as the royalty companies in particular tend to move up significantly and consolidate for 12-18 months. Furthermore, Sandstorm will see growth slow significantly in 2013, only to ramp up again in 2014 beyond. While Bachelor Lake and Serra Pelada will come-onstream, these streams have to make up for the 4% stream reduction from Black Fox and Serra Pelada will only add maringal production in 2013 and it won't be until 2014 when gold and platinum production have a chance to ramp up. Furthermore, in 2014, Bachelor Lake will be completely ramped up and the Deflector Project will add growth on top of Bachelor Lake and Serra Pelada. If that;s not enough Silvercrest;s expansion project on St. Elena will complete in Q1, which will nearly double gold production for the yr. In Short, expect 2014 to be a much more eventful year for Sandstorm;s stock price than 2013.
Yes, they;ve been doing splendidly, making its first sale to the smelters it has contracts with. I;m quite close with the CEO and he said to expect commercial production to be declared in the upcoming week. It;s true, it has been taken out back along with the rest of small mining companies. The only one which has held up and in fact appreciated in the last few months out of my 5 favorite small cap mining securities is Avino Silver & Gold. Aurcana would be up there but they have done quite a number on the share structure ( which contrary to common though has no net effect when a reverse split is done). Colossus Minerals, my favorite junior gold equity has also been taken out back, though recovering some 30% since our official reccomendation in the newsletter. Everything has come along swimmingly for Metanor, another favorite among the micro-caps, though the share price hasn;t budged. Finally, Alexco is doing everything right but still hasn;t recovered. Perhaps when the final (water) permits are granted for Onek and Lucky Queen in the coming weeks, should it start to move up. Assuming everything starts by May, we should be looking at roughly 2.8-2.9m oz.'s up from 2.15m oz.'s in 2012.
The extreme levels the mining stocks in general are trading at is unfortunate but we are lucky we launched our fund almost at the exact bottom. Email me if you would like to peruse our research report on Huldra Silver, Alexco or Colossus. -Chris@Silver-Investor...
Sure, mining is incredibly unpredictable so from time to time something will arise which disrupts production at one of the mines it has a streaming interest on. But on the other hand, I expect many of its assets to outperform current forcasts, making the above illustration conservative. For example, San Dimas is expanding to where it will produce 7m attributable oz.;s p.a. Furthermore, Penasquito, once the water issue is resolved, will undertake a scoping study for an underground operation, which doing back of the envelope numbers would provide 9m oz.;s instead of 7m oz.;s p.a. There are no sure things, but I would be absolutely shocked if Salobo didn;t increase capacity by a minimum of 50% once the next expansion is complete. In Fact, I think Salobo will easily produce an amount whereby Silver Wheatons streaming interest entitles them purchase 120,000 oz. Au p.a. Then there is Keno Hill, which I think is the most overlooked asset, although it will take more time to realize this. And again, we have Constancia, which has enormous epansion potential. and so on.
Additionally, the illustration above assumes some unlikely scenarios, that is Silver Wheaton will make no more acquisitions in the future, silver will not average over $32/oz and the share price would remain stagnant. The reason I posted that was to show that equities (never but only in special circumstances) boast yields upwards or above 10% because the market pushes up the price thereby lowering the dividend yield.
Assmuming a constant SLW price of $32 into perpetuity and no further growth were to be added these would be the dividend yields in 2016 with varying payout ratios and silver prices.
Good News For The Sandstorm Siblings [View article]
There are reasons to be bullish regarding Sandstorm M&E's near term deal flow. They have been looking to acquire a Zinc stream ( as some of the largest mines in the world shutdown including the Century Mine, Lisheen, Brunswick, Persavearance, Skorpion which which will take 1.35m tons off-line in addition to numerous smaller ops going offline. This plus all the contractions of zinc production at mines such as Red dog, San Cristobal, La Ronde and plenty more. In 2014 oat of the surplus will be gone, going into a deficit in 2015 and by 2017 the deficit will grow to 900,000 tons, continuing to grow until at least 2020. Reason being is that there have been no large zinc mines discovered.) I think it would be smart to acquire a stream on one of Trevalis assets but who knows.
Sandstorm will fund this through the sale of a $10m debenture originally from NovaDx, and likely get 2-4m for it plus the 3.26m in cash received from Anterra, sale of equipment from Terrex, worth 3m, so I'll assume they get 2m for it and a $4m debenture from Anterra, which I'll assume they get 2m for it and the sale of of shares it owns of Thunderbird and Donner, worth 1.25m as of today. I used conservative estimates because we never know what will happen.the total comes out to 8.25m. Following the reverse split and only 33m shares outstanding, they will likely issue 4-7m shares raising anywhere from 12-22m. Sandstorm also has roughly 5m in cash, 1-2 of which they'd be willing to spend. So I aggregate ,following the asset sales and equity offering, cash to acquire new streams would be in excess of 26m.
True All-In Costs Of Production: Complete Gold Industry List [View article]
True All-In Costs Of Production: Complete Gold Industry List [View article]
True All-In Costs Of Production: Complete Gold Industry List [View article]
Buying Opportunity For Silver Wheaton [View article]
Buying Opportunity For Silver Wheaton [View article]
http://seekingalpha.co...
Buying Opportunity For Silver Wheaton [View article]
Buy These Silver Miners At Fire Sale Prices [View article]
Sandstorm: Another One Is Coming [View article]
Buy These Silver Miners At Fire Sale Prices [View article]
Now lets go back and assuming Aurcana is still trading at 70c but it only 200m shares outstanding FD. Lets assume this also undergoes a 1:5 reverse split. This would cause Aurcana again to be at $3.50 with just 40m share outstanding. Now what happens to stock price if it were to also appreciate to $630m market cap? The shares would have to appreciate to $15.75 to achieve the same market capitalization. Make Sense?
Sandstorm: Another One Is Coming [View article]
As for Sand, I don't expect a great outta the stock, barring a bug rally in gold due to its attributable growth slowing down year over year. It will, however, kick back into high gear in 2014 as Deflector comes onstream, Serra Pelada contributes a material amount of precious metals, Bachelor Lake is ramped up, Bracemac-Mcleod is ramped up and Aurizona increases production from approx 100k in 2013 to 125k in 2014. Additionally, the St. Elena expansion will be complete, which should increase attributable production from 6k in 2013 to 10-12k in 2014.
Why Sandstorm's Exceptional Value Makes It My Top 2013 Gold Stock [View article]
http://seekingalpha.co...
The above article also includes a in depth valuation. or check out when I first wrote about Sandstorm when it was just trading at $3.30/share back in Jun 2010:
http://seekingalpha.co...
It is hard to believe Sandstorm will have another great year in 2013 as the royalty companies in particular tend to move up significantly and consolidate for 12-18 months. Furthermore, Sandstorm will see growth slow significantly in 2013, only to ramp up again in 2014 beyond. While Bachelor Lake and Serra Pelada will come-onstream, these streams have to make up for the 4% stream reduction from Black Fox and Serra Pelada will only add maringal production in 2013 and it won't be until 2014 when gold and platinum production have a chance to ramp up. Furthermore, in 2014, Bachelor Lake will be completely ramped up and the Deflector Project will add growth on top of Bachelor Lake and Serra Pelada. If that;s not enough Silvercrest;s expansion project on St. Elena will complete in Q1, which will nearly double gold production for the yr. In Short, expect 2014 to be a much more eventful year for Sandstorm;s stock price than 2013.
The New Face Of Silver Wheaton [View article]
The extreme levels the mining stocks in general are trading at is unfortunate but we are lucky we launched our fund almost at the exact bottom. Email me if you would like to peruse our research report on Huldra Silver, Alexco or Colossus.
-Chris@Silver-Investor...
The New Face Of Silver Wheaton [View article]
Additionally, the illustration above assumes some unlikely scenarios, that is Silver Wheaton will make no more acquisitions in the future, silver will not average over $32/oz and the share price would remain stagnant. The reason I posted that was to show that equities (never but only in special circumstances) boast yields upwards or above 10% because the market pushes up the price thereby lowering the dividend yield.
The New Face Of Silver Wheaton [View article]
20% 2.23% 2.94% 3.66% 4.37%
40% 4.46% 5.89% 7.32% 8.74%
60% 6.69% 8.83% 10.97% 13.12%
80% 8.92% 11.78% 14.63% 17.49%
Assmuming a constant SLW price of $32 into perpetuity and no further growth were to be added these would be the dividend yields in 2016 with varying payout ratios and silver prices.