Itinerant

Growth, gold, base metals, oil & gas
Itinerant
Growth, gold, base metals, oil & gas
Contributor since: 2013
You'll read about it in next week's RSD, lonewolf71 :)
Yeah, just do as you are told, Ben, will'ya.
http://bit.ly/1NTICCa
Thanks for the comment, FX Jalarupa, local colour is much appreciated.
I am not aware of any FX hedges for the debt, and the FX loss recorded for the September quarter and referenced in the article also points to an un-hedged exposure. Would you be able to link to a quarterly/annual report with relevant information by any chance?
As for your other points, I wish you only the best, but will take the other side of the trade.
Hi Doc, thanks for stopping by.
Harmony seems to have been quite pro-active with regards to BEE, generally exceeding targets as far as I can tell. Here are a couple of links:
http://bit.ly/1nDfauZ
http://bit.ly/1nDfaLi
There are various references to BEE transactions in the 2015 annual report if you are interested in the details (search for Phoenix, ARM BEE to get started).
Having said that, there is also the rather unfortunate Khumalo incident in which Harmony Gold equity was involved. http://bit.ly/1nDfaLm
well spotted, Einherjar, thank you as well.
Here is the link: http://bit.ly/1NMWP3O
Orex is earning into this property. That's the same team that has found and developed La Preciosa, now part of Coeur's portfolio.
Glad you like it, and thanks for letting us know.
Please come back next week :)
well spotted lonewolf71, thanks for the heads-up.
Here is the link: http://bit.ly/1NMPBwI
Surely the Doc will mention it in next week's installment.
No need to worry about my skin thickness, gwynfryn, and thanks for leaving a comment.
Thanks for the comment DV,
China is the albatross in the resource sector room, I agree.
To be honest, I would love to see Nevsun spend its cash, have been waiting for this to happen for quite some time in fact. Management should be able to find something accretive, especially in this market. I see potential for such an acquisition to unlock value at Bisha as well since it would diversify risk and cash flow which might lead to a higher valuation of the total package.
Hi Einherjar, I like your hypothesis. Unfortunately packages like the Teck package don't come along that often.
In fact, I am not aware of any other miner owning a comparable royalty package. I would be interested to hear if anyone else knows one.
Hi Dan, good to hear from you again & great input as always, much appreciated.
thanks for commenting, ryatnalkar. Me thinks along similar lines.
FIFOkid, thanks for the comment.
I am aware of smelter penalties and recovery (partially thanks to your comments on other articles I believe).
Both will need to be monitored by investors. I believe that the former is priced in, whereas the latter requires scrutinity in upcoming reports.
I have been wondering if recovery issues could have something to do with the tying in of the zinc circuit?
That will depend on the share price at the time, vs. alternative investment opportunities. Personally I hope that market valuation will always be such that Sandstorm management can find better investment opportunities than their own shares.
Thanks for the kind comment Matt.
You are welcome, Erik Becker. Thanks for reading and commenting.
Hi 14596212,
Cash flow covers G&A by a country mile, and will be sufficient to pay back the debt pretty quickly. So I do think that cash flow is important here.
Accounting profits are skewed by the high (non-cash) depletion line item, so I am not paying too much attention to the bottom line, as this will sort itself out soon enough.
Franco Nevada got its break from a bunch of royalties (i.e. royalties), and look what this company has come to.
Plus, I think you are overly conservative with your pay-back time assumptions for the Yamana deal (you can see my take here: http://seekingalpha.co... ).
Diavik payback is rather long, agreed, but so is the mine life beyond the payback. I wasn't overly happy with this deal initially, but I am viewing it as a useful part of the package now, an anchor to the riskier parts of the portfolio if you like.
Hi jbnaples, thanks for bringing this up.
I would have to agree with you that there is that risk with SAND. However, if I understand the situation correctly then this risk would only concern revenue from a relatively small fraction of the assets at this stage.
SLW share price has suffered from the tax uncertainties (CCJ has a similar overhang, by the way). It should be in SLW's best interest to provide clarity to investors quickly, and the outcome will be interesting for SAND investors as well, no doubt.
Hi 14596212,
thanks for your comment.
Personally I rate the Yamana deal very highly, and I didn't mind the Diavik deal as much either. But such is the market, it takes two sides.
I think one should focus on cash flow instead of profits here. Accounting profits are skewed by depletion in my opinion.
Hi Jason, I would much prefer the company to spend the money on a couple more deals like this one (and paying back the debt) - rather than on share buy-backs at this stage.
As long as dilution is out-weighted by the added value per share I don't see a problem at all with additional shares on the registry.
MontanaFede, I might be tempted to reply to your arguments, if only you could find an adequate tone in putting them to me. But then, you will find my answers to your points in the article anyway, if you can be bothered to read it.
Thanks anyway for your contributions to the comment stream.
Thanks for a great article again. Just a couple of comments to add to the discussion if I may:
*/ Water regulations changed and Lydian had to find a new location for the processing plant. This put the company back by over a year, the project was changed from a ridge top leach pad to a valley fill, ore transport from the mine to the pad was changed to a conveyor from trucking etc. (The original project was even more attractive than the current project in my opinion). http://seekingalpha.co...
*/ Crush sizes were changed as a result of the "value engineering" performed after the FS release in late 2014, while organising financing . I don't think these value engineering studies have caused any additional delays.
*/ Some land acquisitions are still pending at the moment as far as I know. Something to watch going forward.
*/ AISC could go even lower than documented in the FS, depending on how much of the in-pit inferred resources can be converted. I have talked to the company about this, and there seems to be quite a bit of optimism to this regard.
jdcarkus, indeed RGLD has had a miserable run of late. I have been pondering a punt myself, but need a bit more time to research the Mt Milligan situation in a TC restructure.
thanks lonewolf71, much appreciated. And don't worry, I am pretty thick skinned :)
The GPL news release came out today, thanks for bringing it up; here is the link: http://bit.ly/1KpeDSx
First Majestic has also released results today: http://bit.ly/1KpeFcX
Santa Elena really is a great asset; will be interesting to see if SilverCrest will find another one like that.
thanks alcamo1940, it's comments like yours that are keeping us going.
TCI, it was you who linked to a tiny newspaper - sorry for pointing it out. And thanks for getting personal yet again.
If you don't want to see my points, then so be it. Good luck to you.
Thanks TCI,
Re: Zortman Landusky. Your link goes to a tiny local newspaper called High Country News "for people who care about the West". Personally I prefer different types of sources for my own research. Here is just one of several examples: http://bit.ly/1ZtOZ66 It has plenty of links for further reading. I think you will see that this sad stories had many underlying issues. Some, but certainly not all, problems were related to the cold climate at this mine site.
Re: Illinois Creek. I used this mine as an example for a cold climate heap leach that went terribly wrong on an economical basis. If you study the case properly, then I am sure you will see that some, and certainly not all, of the problems leading to the bankruptcy are connected with mis-judgements regarding the cold climate. The fact that tax payers had to pay the reclamation bill is only one aspect of this sad story.
The bottom line is that cold climate heap leaching throws up challenges not typically encountered in warmer climates. I have utmost respect for the Kaminak team, and I am sure that a lot of thought has gone into mitigating these challenges. Nevertheless, I am looking forward to reading the full report and understanding the solutions that are being proposed.
Hi TCI, thanks for your comments.
"where does this "quite generously" coming from?"
See section titled "Valuation".
You will find information and links that might help you to understand the challenges of cold climate leaching throughout the article. As for Kaminak, I have clearly stated in the article that I am not expecting fatal flaws, but need to verify details when the full report is released. Discussion with management will certainly form part of this verification.
Fort Knox differs in many aspects from the proposed Coffee mine, and direct comparison is dangerous. I am sure you will agree when you read the available technical reports on Fort Knox. Here is a link for your convenience:
http://bit.ly/1n8C1Pg
Incorrect. For example, this one from last week comes up third: http://bit.ly/1SNWKnl .
Plenty of others as well especially if you refine your google search.
The original UBS piece is behind a pay wall, so it would not make sense to link to it.
There are plenty of other sources reporting on the UBS piece. Google search brings up a myriad if you are really interested:
http://bit.ly/1mSWHdy
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