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James Emerson, CFA

 
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  • Update: Tanzanian Royalty Exploration Releases Drill Results For Buckreef South Block [View article]
    I think that construction of the leach pads and performing the grade control drilling were the lowest cost ways of showing activity at Buckreef. I think that the company needed to do something to convince shareholders and STAMICO that there was some prospect of redeveloping the mine. I think that the company will run out of money very soon and is on the path to hibernation. Mr. Sinclair's strategy seems predicated on a significantly higher price of gold.
    Sep 12 12:21 PM | Likes Like |Link to Comment
  • Update: Tanzanian Royalty Exploration Releases Drill Results For Buckreef South Block [View article]
    These drill results are from Grade Control Drilling and do not represent the delineation of additional resources. From a drilling web site, "The purpose of grade control is for mining companies to accurately plan for variability in deposits; considering the different facets before mining." The drilling was conducted to develop an optimized mine plan. In my opinion, the company released these results to give the illusion of conducting a mining operation. The company has not purchased the requisite equipment to either mine or process the ore. Constructing heap leach pads and conducting grade control drilling are comparatively low cost ways to demonstrate progress to shareholders. In the absence of any substantial equipment purchases, this announcement and the previous one are mere window dressing.
    Sep 9 09:22 AM | 1 Like Like |Link to Comment
  • Update: Tanzanian Royalty Exploration Completes Its Buckreef Heap Leach Pad Construction [View article]
    The last analyst to publish research on the company was David G. Snow of Energy Equities. His piece came out on January 31, 2012. He had a 2 year price target of $6-$10. The piece is poorly written and contains factual errors. This piece was probably commissioned by TRX or by their investor relations firm, LH Roth. Be aware that Mr. Snow was previously censured and fined by the SEC for not disclosing that he was paid to write a research report and that he had a position in the company which was the subject of his report. http://1.usa.gov/1weVE70 No legitimate analyst follows this company.
    Sep 9 09:08 AM | Likes Like |Link to Comment
  • Update: Tanzanian Royalty Exploration Completes Its Buckreef Heap Leach Pad Construction [View article]
    This stock is headed to zero. The buy level is $0.10 but only to cover a short.

    Without a capital infusion or significant cuts in corporate overhead, I project that TRX will run out of money around Thanksgiving.

    Over three years have passed since TRX entered into the JV to redevelop Buckreef. During that time, TRX failed to raise sufficient capital for the project despite gold trading up to $1,900 in 2011. Gold is now below $1,300 per oz., and the project is less appealing. While TRX might be able to raise enough capital to maintain the corporate structure, I sincerely doubt that TRX can raise enough capital fund operations in Tanzania to launch this project.

    Besides, completion of the leach pads is hardly a noteworthy accomplishment. In essence in four months, all the company managed to do was grade the equivalent of four football pitches and cover them with a plastic liner. Here is a picture. http://bit.ly/1rPTZ9V

    What is more important, is what is absent from the press release. TRX failed to mention the purchase of any articulated dump trucks, excavators, or processing plants, or the hiring and training of any staff. In order to actually move to production, TRX needs to arrange for electrical power, order earthmoving and extraction equipment, and order and commission milling and processing plants. Mr. Sinclair can "look forward" to anything he wants. But the reality is that the company is inadequately capitalized to actually accomplish anything.

    This is reality. According to the latest Techincal on the Buckreef Project report by Venmyn Deloitte, "TRX is currently considering the use of small, mobile modular plants in its developmental plan going forward. Each modular plant is a self-contained unit comprising a 30,000tpm crushing/milling, CIL and electro-winning module at an individual cost of USD20m each." With only about $3 million in cash in the bank, it is extremely unlikely that TRX will be able to purchase a $20 million piece of equipment, let alone acquire all the other necessary equipment.
    Sep 5 10:27 AM | Likes Like |Link to Comment
  • Fusion Increases Second Quarter Revenue by 63% [View article]
    While the headline year of year growth in revenue seems impressive it was almost entirely driven by the Broadvox acquisition. Quarter over quarter revenue growth was a paltry 1%. Potential investors should be concerned that year over year operating cash flow only increased by $0.5 million on the revenue increase of $8.9 million
    Aug 20 02:20 PM | Likes Like |Link to Comment
  • Fusion Increases Second Quarter Revenue by 63% [View article]
    Something is suspect about the announcement which was made on Aug 15. "On August 12, 2014, Fusion Telecommunications International, Inc. (the “Company”), with the approval of its audit committee, terminated the engagement of KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm. The Company’s decision to terminate the engagement was based on uncertainty surrounding the time to complete the review of the Company’s consolidated financial statements for the quarterly period ended June 30, 2014." It would seem to me if the company was concerned about timing that they wouldn't change accountants seven weeks after the end of the quarter. Seems highly unlikely that the new accounting firm could conduct a review of the financial statements in the seven days between when they were engaged and when the financials were released. It may be nothing. KPMG is top tier firm and may not have been as responsive to the company as Rothstein Kass was. Eisner Amper is a high quality firm from the same tier as Rothstein Kass just below KPMG. Note: Either firms that I worked for have or I have engaged all three firms for audit/assurance and or attestation work. They are all excellent accountants. KPMG's statement was terse at best "On August 12, 2014, we were dismissed. We have read Fusion’s statements included under Item 4.01 of its Form 8-K dated August 15, 2014, and we agree with such statements, except that we are not in a position to agree or disagree with Fusion’s stated reason to terminate the engagement"
    Aug 20 01:31 PM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    Looks like about $300K worth of equipment was purchased in the quarter, an insignificant amount by any measure and clearly inadequate to commence an open pit mining operation. The real issue is how few quarters of cash this company has left. TRX had $3.5 million of net cash at the end of May. That is probably down to around $2.5 million based on the burn rate. There is absolutely no prospect of commercial production with this little cash in the bank.
    Jul 17 09:07 AM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    You can document it by looking at the merger documents and by reviewing insider transactions on the official Canadian insider transaction site http://www.sedi.ca
    Jul 17 08:53 AM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    I got my balance sheet from the official site for Canadian securities filings http://www.sedar.com. The difference between $2.1 million and $1.7 million per quarter is trivial for a company with $3.5 million in cash. The cash burn rate is an estimate and the actual amount is variable due to discretionary expenditures on exploration and mine development activities. The negative cash flow for repayment of convertible debt will not be recurring; however, TRX will have to pay STAMICO close to that amount in 2015 to maintain the Buckreef JV.

    In order to stay in business, TRX needs to come up with money from somewhere. It doesn't matter if Sinclair participates. There is no information content to his actions. He has been a significant net seller of shares over the years, which is odd behavior for the CEO of an exploration company. Previously every time he purchased shares, he sold.
    Jul 17 08:48 AM | Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    TRX has stated that their strategy is to commence production at the company's primary asset, Buckreef. I view the odds of the company successfully implementing that strategy as close to zero. They have already missed their progress targets announced at the Annual General meeting in February this year.

    TRX is currently burning about $2.1 million of cash per quarter. As of May 31st, the company had $4.3 million of cash on the balance sheet and $800,000 of payables for net cash of $3.5 million. I estimate that the current cash position is about $2.5 million after accounting for the passage of a month and a half from the date of the financial statements. Given their precarious financial situation, I seriously doubt that TRX will boost the exploration budget. My opinion is quite the opposite in fact, I think that TRX will soon reduce or suspend mining operations in Tanzania.
    Jul 15 06:01 PM | Likes Like |Link to Comment
  • Why Seeking Alpha Embraces Pseudonymity [View article]
    Management of companies has the coercive power to silence critics. The use of a pseudonym protects authors from vindictive managements that have company treasuries at their disposal to engage lawyers to file legal actions. Read David Einhorn's book Fooling Some of the People All of the Time. There would be little to no discourse about short candidates without the protection afforded by annonymity on SeekingAlpha.
    Mar 19 04:54 PM | 4 Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    All the shares Mr. Sinclair sold speak louder than the few he has left. If he and management were at all confident they would have been buying stock in the open market when it was below $2.
    Mar 19 09:20 AM | Likes Like |Link to Comment
  • BlackBerry Is Still A Great Buy In 2014 And What's Next For The Market [View article]
    Just curious, how exactly is the company going to 1) return to the core strengths of enterprise and security 2) implement changes in the Company's Devices business without actually selling any devices?
    Feb 20 10:31 AM | 3 Likes Like |Link to Comment
  • BlackBerry Is Still A Great Buy In 2014 And What's Next For The Market [View article]
    Just some color... My assistant called T-Mobile to order a Q10. The rep. told her that Blackberry is going out of business and she shouldn't get this phone. I tried to get the Q10 in a T Mobile store in midtown Manhattan. not only is the device not available the salesperson told me that all carriers except AT&T were going to drop Blackberry.
    Feb 20 09:13 AM | 4 Likes Like |Link to Comment
  • Tanzanian Royalty Exploration: The Next Tanzanian Gold Producer [View article]
    Sinclair has been a consistent seller in the $3 to $5 share price range. While he may allude to higher prices his actions tell a different story about his price expectations. The CFO sold a significant portion of his stock with a $3 handle towards the end of last year, hardly a vote of confidence.
    Feb 19 11:42 AM | Likes Like |Link to Comment
COMMENTS STATS
250 Comments
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