Thomas Tan - Seeking Alpha

Thomas Tan - Seeking Alpha 'Thomas Tan' Tag RSS Syndication from SeekingAlpha.com SeekingAlpha.com http://seekingalpha.com/author/thomas-tan Huron Consulting: Getting Too Close to Its Roots http://seekingalpha.com/article/155184-huron-consulting-getting-too-close-to-its-roots?source=feed 155184

For people scanning the large stock movement last Monday (Aug 3), they must have noticed Huron Consulting (HURN) dropped 70% that day. And the news announced was bad. Huron has to restate their earnings since 2006, lower their 2009 guidance, and the whole top management team resigned, including Chairman and CEO, CFO and CAO. The key thing causing this is the very disturbing accounting treatment of so-called “redistributed earnings” to a few key employees who have been involving in M&A acquisitions, along with a few other accounting irregularities such as allocation of chargeable hours.

Huron was formed by 25 partners from Arthur Andersen, led by a senior partner who had become Huron’s Chairman and CEO until his resignation last week. We all know Arthur Andersen was indicted related to the Enron scandal, which was one of their largest customers and had paid Arthur Andersen well to cook their books. A few months after it was formed with capital provided by another Chicago firm, Huron quickly landed its first project and client, United Airlines (UAUA). No wonder they say management consulting is basically a relationship business, not a problem solving business. Since then it had been a home run - until last week.

]]> Mon, 10 Aug 2009 15:37:26 -0400 Thomas Tan

For people scanning the large stock movement last Monday (Aug 3), they must have noticed Huron Consulting (HURN) dropped 70% that day. And the news announced was bad. Huron has to restate their earnings since 2006, lower their 2009 guidance, and the whole top management team resigned, including Chairman and CEO, CFO and CAO. The key thing causing this is the very disturbing accounting treatment of so-called “redistributed earnings” to a few key employees who have been involving in M&A acquisitions, along with a few other accounting irregularities such as allocation of chargeable hours.

Huron was formed by 25 partners from Arthur Andersen, led by a senior partner who had become Huron’s Chairman and CEO until his resignation last week. We all know Arthur Andersen was indicted related to the Enron scandal, which was one of their largest customers and had paid Arthur Andersen well to cook their books. A few months after it was formed with capital provided by another Chicago firm, Huron quickly landed its first project and client, United Airlines (UAUA). No wonder they say management consulting is basically a relationship business, not a problem solving business. Since then it had been a home run - until last week.

Complete Story »]]> HURN Thomas Tan Bank Profits Pick Our Pockets http://seekingalpha.com/article/153612-bank-profits-pick-our-pockets?source=feed 153612

There is a very interesting article “Wall Street profits from trades with Fed”, published at Financial Times’ website Sunday night. It confirms my long time suspicion on the reality and truth about “profit” announced by a few major Wall Street banks these days. As we all know, most of their profit is now coming from the so-called “trading” area. This FT article demystifies at least partially what they are, and where they are coming from. They are actually coming from the Fed, since now the Fed is their largest customer (not the public). So it is the trading profit generated within this shadow banking system, or playing games among themselves.

Due to regulation of required transparency, Fed has to announce beforehand their intention to buy certain securities. This gives plenty time to these major Wall Street banks to first load up these securities, and pump up their prices so they can sell them to the Fed later at inflated prices and book profits that way.

]]> Tue, 04 Aug 2009 11:19:16 -0400 Thomas Tan

There is a very interesting article “Wall Street profits from trades with Fed”, published at Financial Times’ website Sunday night. It confirms my long time suspicion on the reality and truth about “profit” announced by a few major Wall Street banks these days. As we all know, most of their profit is now coming from the so-called “trading” area. This FT article demystifies at least partially what they are, and where they are coming from. They are actually coming from the Fed, since now the Fed is their largest customer (not the public). So it is the trading profit generated within this shadow banking system, or playing games among themselves.

Due to regulation of required transparency, Fed has to announce beforehand their intention to buy certain securities. This gives plenty time to these major Wall Street banks to first load up these securities, and pump up their prices so they can sell them to the Fed later at inflated prices and book profits that way.

Complete Story »]]> GS JPM MS Thomas Tan What's To Be Done About Citigroup? http://seekingalpha.com/article/141877-what-s-to-be-done-about-citigroup?source=feed 141877

FDIC Chairwoman Sheila Bair indicated last week that she is pushing to purge Citi’s (C) top management, especially its CEO, Vikram Pandit. It shows that the regulators in the government are losing patience with the snail's pace of “reform” at Citi. In many of my previous posts at Seeking Alpha, and from day one of Pandit's appointment as CEO, I voiced strong disagreement and still think his appointment is the single worst decision ever made by Citi’s board.

There are several reasons. First of all, it is Vikram Pandit’s background. He was basically a quant guy selling toxic structured products at Morgan Stanley’s institutional sales, and then a money losing hedge fund manager. If Citi hadn't been a sucker and bought out his tiny firm after he left Morgan Stanley, for an unjustifiable, overinflated and very questionable price, Pandit's fund would have folded long before it finally did recently at Citi.

]]> Mon, 08 Jun 2009 05:11:09 -0400 Thomas Tan

FDIC Chairwoman Sheila Bair indicated last week that she is pushing to purge Citi’s (C) top management, especially its CEO, Vikram Pandit. It shows that the regulators in the government are losing patience with the snail's pace of “reform” at Citi. In many of my previous posts at Seeking Alpha, and from day one of Pandit's appointment as CEO, I voiced strong disagreement and still think his appointment is the single worst decision ever made by Citi’s board.

There are several reasons. First of all, it is Vikram Pandit’s background. He was basically a quant guy selling toxic structured products at Morgan Stanley’s institutional sales, and then a money losing hedge fund manager. If Citi hadn't been a sucker and bought out his tiny firm after he left Morgan Stanley, for an unjustifiable, overinflated and very questionable price, Pandit's fund would have folded long before it finally did recently at Citi.

Complete Story »]]> AIG BAC C GMGMQ.PK IYF JPM WAMUQ.PK Thomas Tan How Much of the Banks' Earnings Are Real? http://seekingalpha.com/article/134997-how-much-of-the-banks-earnings-are-real?source=feed 134997 Last month, many banks reported strong earnings. Market sentiment has suddenly changed substantially. Only a few months ago, the collapse of the US banking industry threatened to bring down the whole global economy. Now, suddenly, the picture looks rosier than ever and this financial crisis seems to be over. Or is it?

With very limited transparency of bank earnings, there are several so-called earnings areas that investors should question whether they are sustainable, and a few other areas that investors should ask whether they are even real. They are as follows:

]]> Mon, 04 May 2009 05:57:26 -0400 Thomas Tan Last month, many banks reported strong earnings. Market sentiment has suddenly changed substantially. Only a few months ago, the collapse of the US banking industry threatened to bring down the whole global economy. Now, suddenly, the picture looks rosier than ever and this financial crisis seems to be over. Or is it?

With very limited transparency of bank earnings, there are several so-called earnings areas that investors should question whether they are sustainable, and a few other areas that investors should ask whether they are even real. They are as follows:

Complete Story »]]> AIG BAC C GS JPM KBE MS WFC XLF Thomas Tan How Derivatives Got Cities and Counties in Hot Water http://seekingalpha.com/article/130163-how-derivatives-got-cities-and-counties-in-hot-water?source=feed 130163 There were two articles at NYT yesterday on the municipal financial situation. You can read them here and here. The first one is about how Moody’s Investors Service assigned a negative outlook to the creditworthiness of all local governments in the United States, the first time it had ever issued such a blanket report on municipalities. This kind of message will likely lead to many downgrades of municipal bonds in the near future.

The second article is more interesting. In Tennessee, a single investment bank, Morgan Keegan, sold $2 billion worth of municipal bond derivatives to 38 cities and counties since 2001, dominating and monopolizing this market there. What is even more interesting is that Morgan Keegan wears several hats at the same time and engages in all phases of selling the derivatives.

]]> Wed, 08 Apr 2009 15:39:07 -0400 Thomas Tan There were two articles at NYT yesterday on the municipal financial situation. You can read them here and here. The first one is about how Moody’s Investors Service assigned a negative outlook to the creditworthiness of all local governments in the United States, the first time it had ever issued such a blanket report on municipalities. This kind of message will likely lead to many downgrades of municipal bonds in the near future.

The second article is more interesting. In Tennessee, a single investment bank, Morgan Keegan, sold $2 billion worth of municipal bond derivatives to 38 cities and counties since 2001, dominating and monopolizing this market there. What is even more interesting is that Morgan Keegan wears several hats at the same time and engages in all phases of selling the derivatives.

Complete Story »]]> Thomas Tan Spread Between Fed Funds Rate and Mortgages: History Doesn't Support Greenspan http://seekingalpha.com/article/129941-spread-between-fed-funds-rate-and-mortgages-history-doesn-t-support-greenspan?source=feed 129941

Courtesy of Lugwig von Mises Institute

]]> Tue, 07 Apr 2009 13:52:49 -0400 Thomas Tan

Courtesy of Lugwig von Mises Institute

Complete Story »]]> Thomas Tan Ben Bernanke's Dismal Prediction Record http://seekingalpha.com/article/127832-ben-bernanke-s-dismal-prediction-record?source=feed 127832

Ben Bernanke has a long history and record of predicting the market wrong. Whatever he says, in less than half year, everything seems to go very wrong in the other direction. Now he says the recession will be over by end of this year. This alone should get all of us worried.

In March 2007, he said the subprime crisis was contained when it was barely starting. When the problem of delinquencies and foreclosures started to surface, he said, “Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited.” We all know what happened next.

]]> Wed, 25 Mar 2009 12:25:34 -0400 Thomas Tan

Ben Bernanke has a long history and record of predicting the market wrong. Whatever he says, in less than half year, everything seems to go very wrong in the other direction. Now he says the recession will be over by end of this year. This alone should get all of us worried.

In March 2007, he said the subprime crisis was contained when it was barely starting. When the problem of delinquencies and foreclosures started to surface, he said, “Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited.” We all know what happened next.

Complete Story »]]> Thomas Tan Deleveraging, Deflation and Debt: A Long and Painful Process http://seekingalpha.com/article/122911-deleveraging-deflation-and-debt-a-long-and-painful-process?source=feed 122911

If you haven’t read this Barron’s interview with Ray Dalio, Chief Investment Officer, Bridgewater Associates, titled “Recession? No, It's a D-process, and It Will Be Long”, I would highly recommend it. I happen to hold many similar views to his.

Here are some excerpts from what Ray said, with my comments.

]]> Thu, 26 Feb 2009 13:05:02 -0500 Thomas Tan

If you haven’t read this Barron’s interview with Ray Dalio, Chief Investment Officer, Bridgewater Associates, titled “Recession? No, It's a D-process, and It Will Be Long”, I would highly recommend it. I happen to hold many similar views to his.

Here are some excerpts from what Ray said, with my comments.

Complete Story »]]> Thomas Tan Real Estate: Apocalypse Now http://seekingalpha.com/article/121818-real-estate-apocalypse-now?source=feed 121818

Courtesy of The New York Times

What has caused the great industrial conglomerate of General Electric (GE) to be trading at a single digit today? It is because of their stupid decision to get into financial services by establishing and using GE Capital to manipulate their earnings. So much for beating Wall St. consensus by one cent for consecutive 30 quarters since 2000, while their stock has been dropping from $60 to <$10. I guess everyone playing this game of financial manipulation and distortion has to pay for it sooner or later.

]]> Sat, 21 Feb 2009 12:30:12 -0500 Thomas Tan

Courtesy of The New York Times

What has caused the great industrial conglomerate of General Electric (GE) to be trading at a single digit today? It is because of their stupid decision to get into financial services by establishing and using GE Capital to manipulate their earnings. So much for beating Wall St. consensus by one cent for consecutive 30 quarters since 2000, while their stock has been dropping from $60 to <$10. I guess everyone playing this game of financial manipulation and distortion has to pay for it sooner or later.

Complete Story »]]> IYR Thomas Tan Risk Management, Or Risk Manipulation http://seekingalpha.com/article/117671-risk-management-or-risk-manipulation?source=feed 117671 Value at risk (VaR) financial models are the latest game being played by those on Wall Street who profess to manage risk, a troubling trend detailed superbly by Joe Nocera in a January 2 New York Times Magazine article. Such models give bankers a false sense of confidence in their risk control while, in reality, they increase the level of risk for society as a whole.

]]> Fri, 30 Jan 2009 12:00:57 -0500 Thomas Tan Value at risk (VaR) financial models are the latest game being played by those on Wall Street who profess to manage risk, a troubling trend detailed superbly by Joe Nocera in a January 2 New York Times Magazine article. Such models give bankers a false sense of confidence in their risk control while, in reality, they increase the level of risk for society as a whole.

Complete Story »]]> Thomas Tan Western Goldfields: Cash Is King http://seekingalpha.com/article/109702-western-goldfields-cash-is-king?source=feed 109702 Everyone remembers the California gold rush a century ago, but few know a large gold mine is currently under operations in the southeast corner of California near the Arizona and Mexican borders. This is the mining operations known as the Mesquite Mine managed by Western Goldfields (Amex: WGW).

This mine was actually operated from 1985 to 2001 by several mining companies including Newmont, but was suspended in 2001 when gold prices fell to the bottom. However, Western Goldfields acquired the mine in 2003, and production re-started in January of this year, the timing of which couldn’t have been better since the current turmoil in the credit market makes any financing very difficult if not impossible for some other cash stripped mining companies.

]]> Mon, 08 Dec 2008 11:04:54 -0500 Thomas Tan Everyone remembers the California gold rush a century ago, but few know a large gold mine is currently under operations in the southeast corner of California near the Arizona and Mexican borders. This is the mining operations known as the Mesquite Mine managed by Western Goldfields (Amex: WGW).

This mine was actually operated from 1985 to 2001 by several mining companies including Newmont, but was suspended in 2001 when gold prices fell to the bottom. However, Western Goldfields acquired the mine in 2003, and production re-started in January of this year, the timing of which couldn’t have been better since the current turmoil in the credit market makes any financing very difficult if not impossible for some other cash stripped mining companies.

Complete Story »]]> WGW Thomas Tan 2008 - Where I Was Right and What I Could Not Have Imagined http://seekingalpha.com/article/108562-2008-where-i-was-right-and-what-i-could-not-have-imagined?source=feed 108562 What a year. It has been 11 months since I put out “My Ten Predictions for 2008.” In general, I think my predictions have luckily turned out to be about right, but I underestimated the severity of both the up and down movement.

Former Goldman Chairman John Whitehead said on Nov 12th that the current crisis is worse than the great depression in 1930s. For the past year, I have been saying all along that this crisis is a repeat of the 1930s and 1970s, but I didn’t expect it would be worse than the 1930s, probably only a repeat of the 1970s.

]]> Mon, 01 Dec 2008 12:33:03 -0500 Thomas Tan What a year. It has been 11 months since I put out “My Ten Predictions for 2008.” In general, I think my predictions have luckily turned out to be about right, but I underestimated the severity of both the up and down movement.

Former Goldman Chairman John Whitehead said on Nov 12th that the current crisis is worse than the great depression in 1930s. For the past year, I have been saying all along that this crisis is a repeat of the 1930s and 1970s, but I didn’t expect it would be worse than the 1930s, probably only a repeat of the 1970s.

Complete Story »]]> C GDX GLD HUI SLV UDN USO UUP Thomas Tan Augusta Resources Focuses on Advancing Copper Rich Deposit in Arizona http://seekingalpha.com/article/104508-augusta-resources-focuses-on-advancing-copper-rich-deposit-in-arizona?source=feed 104508 Augusta Resources (AZC) is primarily focused on the Rosemont Copper deposit near Tucson, Arizona, one of the largest copper mines currently in development in the North America. Augusta is headquartered in Denver, Colorado, and their Rosemont property is 50 km southeast of Tucson, conveniently located for mining operations via highway, a network of unpaved roads, and proximity to major transmission lines and main rail lines to key ports. Their President & CEO, Mr. Gil Clausen, was in New York City on October 29th to discuss their strategy and the growth potential of their resources.

In the past week or so, Augusta has two important announcements. They first announced on October 31st that a silver off-take financing arrangement with Silver Wheaton is to be re-structured upon completion of the updated bankable feasibility study which is expected to be complete by year end. My expectation is that the term will likely be more favorable than the previous agreement elected back in April, 2008, due to higher resource estimates and thus better economic value. Then on Monday, November 3rd, they announced that they received significant strategic interest regarding their 100% owned Rosemont Copper/Moly project.

]]> Thu, 06 Nov 2008 15:32:54 -0500 Thomas Tan Augusta Resources (AZC) is primarily focused on the Rosemont Copper deposit near Tucson, Arizona, one of the largest copper mines currently in development in the North America. Augusta is headquartered in Denver, Colorado, and their Rosemont property is 50 km southeast of Tucson, conveniently located for mining operations via highway, a network of unpaved roads, and proximity to major transmission lines and main rail lines to key ports. Their President & CEO, Mr. Gil Clausen, was in New York City on October 29th to discuss their strategy and the growth potential of their resources.

In the past week or so, Augusta has two important announcements. They first announced on October 31st that a silver off-take financing arrangement with Silver Wheaton is to be re-structured upon completion of the updated bankable feasibility study which is expected to be complete by year end. My expectation is that the term will likely be more favorable than the previous agreement elected back in April, 2008, due to higher resource estimates and thus better economic value. Then on Monday, November 3rd, they announced that they received significant strategic interest regarding their 100% owned Rosemont Copper/Moly project.

Complete Story »]]> AZC Thomas Tan Survival of the Longest http://seekingalpha.com/article/100030-survival-of-the-longest?source=feed 100030 This article was written on Sunday, October 12.

What a week! What a month! The S&P 500 started around $1,250 a month ago, was as high as $1,200 at some point two weeks ago, and, doing what no one had ever imagined it could, dropped below $850 last Friday. I gave out an $800 target in August last year, which the S&P 500 is on its way to test now. It was an easy target to give since it was the low of the 2001-2003 bear market. Even the market is quite oversold, and due to for a dead cat bouncing. I now doubt that $800 will be the bottom for the bear market, and there is no support whatsoever in sight once $800 is decisively broken, until around $4-500.

]]> Wed, 15 Oct 2008 11:45:28 -0400 Thomas Tan This article was written on Sunday, October 12.

What a week! What a month! The S&P 500 started around $1,250 a month ago, was as high as $1,200 at some point two weeks ago, and, doing what no one had ever imagined it could, dropped below $850 last Friday. I gave out an $800 target in August last year, which the S&P 500 is on its way to test now. It was an easy target to give since it was the low of the 2001-2003 bear market. Even the market is quite oversold, and due to for a dead cat bouncing. I now doubt that $800 will be the bottom for the bear market, and there is no support whatsoever in sight once $800 is decisively broken, until around $4-500.

Complete Story »]]> BX DIA GLD MS QQQQ SPY UDN UUP Thomas Tan How Long Will the Bear Market Last? http://seekingalpha.com/article/99838-how-long-will-the-bear-market-last?source=feed 99838 What a week! What a month! S&P 500 started around 1,250 a month ago, was as high as 1,200 at some point two weeks ago, and no one had ever imagined it could drop below 850 last Friday. I gave out an 800 target in August last year at one of my old articles, which S&P 500 is on its way to test now. It was an easy target to give since it was the low of the 2001-2003 bear market. Even the market is quite oversold, and due to a dead cat bounce, I doubt now 800 will be the bottom for the bear market, and there is no support whatsoever in sight once 800 is decisively broken, until around 4-500.

After the 1987 crash, government has implemented the so-called circuit breaker system which they hope would prevent a one-day crash of 20%. However, people are always smarter than the system and will always find a way to get around it. Instead of dropping 20% in one day, let us do it 5% a day on average, and easily beat the 20% record in 1987 by a wide margin last week. The next thing government can try is market holiday(s) and eventually bank holidays like in the 1930s.

]]> Tue, 14 Oct 2008 17:46:35 -0400 Thomas Tan What a week! What a month! S&P 500 started around 1,250 a month ago, was as high as 1,200 at some point two weeks ago, and no one had ever imagined it could drop below 850 last Friday. I gave out an 800 target in August last year at one of my old articles, which S&P 500 is on its way to test now. It was an easy target to give since it was the low of the 2001-2003 bear market. Even the market is quite oversold, and due to a dead cat bounce, I doubt now 800 will be the bottom for the bear market, and there is no support whatsoever in sight once 800 is decisively broken, until around 4-500.

After the 1987 crash, government has implemented the so-called circuit breaker system which they hope would prevent a one-day crash of 20%. However, people are always smarter than the system and will always find a way to get around it. Instead of dropping 20% in one day, let us do it 5% a day on average, and easily beat the 20% record in 1987 by a wide margin last week. The next thing government can try is market holiday(s) and eventually bank holidays like in the 1930s.

Complete Story »]]> SPY XLF Thomas Tan Agnico Eagle: The Focus Is on Per Share Value Creation for Shareholders http://seekingalpha.com/article/95357-agnico-eagle-the-focus-is-on-per-share-value-creation-for-shareholders?source=feed 95357 Agnico-Eagle (AEM) is an international gold producer, headquartered in Toronto, Canada, with advanced-stage projects and opportunities in Canada, Mexico and Finland. The CEO, Mr. Sean Boyd, was in New York City on August 29th to talk about the company's strategy and growth potential at the Yale Club. There are six major 100% owned gold mines in AEM’s portfolio, all in low geopolitical risk regions:

LaRonde mine in Quebec is Canada's largest gold deposit in terms of reserves, with P&P (proven and probable) gold reserves of 5 million ounces, which has generated strong earnings and cash flows for AEM. Current production is about 200,000 ounces of gold but in 5 years it is expected to ramp up to 400,000 ounces.
Gold production will begin in this quarter at AEM’s Goldex mine near LaRonde, which holds more than 1.6 million ounces of gold and is expected to produce more than 150,000 ounces of gold next year.
In Finland, construction of the Kittila gold mine commenced in the summer of 2006, with initial production expected in the fourth quarter of 2008. This mine has probable reserves of 3 million ounces and is expected to produce 150,000 ounces of gold next year for AEM.
Shaft sinking is complete and level development underway at the Lapa deposit, also in Quebec, Canada, with probable gold reserves of 1.1 million ounces. Production is expected in mid-year 2009 with average annual production of 125,000 ounces.
The Meadowbank project in the Nunavut Territory in northern Canada is advancing towards initial gold production in the 1st quarter, 2010, which has probable gold reserves of 3.5 million ounces and is expected to add 360,000 ounces of gold production per year to AEM.
Initial gold and silver production at AEM’s Pinos Altos project in Mexico is expected in third quarter 2009. It has probable gold reserves of 2.5 million ounces, 73.1 million ounces of silver from 24.7 million tonnes at 3.2 g/t gold and 92.2 g/t silver. Full annual production is estimated to be around 150,000 to 200,000 ounces of gold.

In general, AEM is estimated to produce around 300,000 ounces of gold this year, about 2/3 from LaRonde mine and the rest from Goldex and Kittila. However, we should see explosive increase in gold production for AEM in the next 2-3 years. Overall, gold production is estimated to be over 600,000 ounces next year due to contributions from Goldex, Lapa, Kittila and Pinos Altos. In 2010 and beyond, we should see Meadowbank make a big splash by producing likely 360,000 ounces of gold per year alone. The whole gold production for AEM should reach close to 1.4 million ounces of gold at that time, more than quadruple from this year’s estimate of 300,000.

]]> Sun, 14 Sep 2008 08:47:12 -0400 Thomas Tan Agnico-Eagle (AEM) is an international gold producer, headquartered in Toronto, Canada, with advanced-stage projects and opportunities in Canada, Mexico and Finland. The CEO, Mr. Sean Boyd, was in New York City on August 29th to talk about the company's strategy and growth potential at the Yale Club. There are six major 100% owned gold mines in AEM’s portfolio, all in low geopolitical risk regions:

LaRonde mine in Quebec is Canada's largest gold deposit in terms of reserves, with P&P (proven and probable) gold reserves of 5 million ounces, which has generated strong earnings and cash flows for AEM. Current production is about 200,000 ounces of gold but in 5 years it is expected to ramp up to 400,000 ounces.
Gold production will begin in this quarter at AEM’s Goldex mine near LaRonde, which holds more than 1.6 million ounces of gold and is expected to produce more than 150,000 ounces of gold next year.
In Finland, construction of the Kittila gold mine commenced in the summer of 2006, with initial production expected in the fourth quarter of 2008. This mine has probable reserves of 3 million ounces and is expected to produce 150,000 ounces of gold next year for AEM.
Shaft sinking is complete and level development underway at the Lapa deposit, also in Quebec, Canada, with probable gold reserves of 1.1 million ounces. Production is expected in mid-year 2009 with average annual production of 125,000 ounces.
The Meadowbank project in the Nunavut Territory in northern Canada is advancing towards initial gold production in the 1st quarter, 2010, which has probable gold reserves of 3.5 million ounces and is expected to add 360,000 ounces of gold production per year to AEM.
Initial gold and silver production at AEM’s Pinos Altos project in Mexico is expected in third quarter 2009. It has probable gold reserves of 2.5 million ounces, 73.1 million ounces of silver from 24.7 million tonnes at 3.2 g/t gold and 92.2 g/t silver. Full annual production is estimated to be around 150,000 to 200,000 ounces of gold.

In general, AEM is estimated to produce around 300,000 ounces of gold this year, about 2/3 from LaRonde mine and the rest from Goldex and Kittila. However, we should see explosive increase in gold production for AEM in the next 2-3 years. Overall, gold production is estimated to be over 600,000 ounces next year due to contributions from Goldex, Lapa, Kittila and Pinos Altos. In 2010 and beyond, we should see Meadowbank make a big splash by producing likely 360,000 ounces of gold per year alone. The whole gold production for AEM should reach close to 1.4 million ounces of gold at that time, more than quadruple from this year’s estimate of 300,000.

Complete Story »]]> AEM Thomas Tan McCoy: Fast-Growing Canadian Energy Services Provider http://seekingalpha.com/article/94015-mccoy-fast-growing-canadian-energy-services-provider?source=feed 94015

McCoy Corporation (MCCRF.PK)[TSE:MCB] is a Canadian-based energy services provider headquartered in Edmonton, Alberta with operations in three major business segments: energy products & services [EP&S], trailer manufacturing [TLM], and truck & trailer products & services [TT&S].

The EP&S segment manufactures computerized torque turn monitoring equipment, hydraulic power tongs for land and off-shore rigs, tong trucks, dies and inserts, trailer mounted hydrovac and vacuum tanks, specialized coatings, etc. McCoy says it is the largest independent worldwide manufacturer of hydraulic power tongs. The TLM segment produces lowboys, flat decks, step decks, oilfield floats and specialty trailers. It is also a market leader in manufactured logging trailers for Western Canada. The TT&S segment specializes in equipment installation, suspension work, welding, safety inspections, brake service, alignments, frame straightening, axles and hydraulics for heavy-duty and some light-duty trucks. This third segment is more locally GDP driven than by the oil and gas industry alone.

]]> Thu, 04 Sep 2008 08:44:11 -0400 Thomas Tan

McCoy Corporation (MCCRF.PK)[TSE:MCB] is a Canadian-based energy services provider headquartered in Edmonton, Alberta with operations in three major business segments: energy products & services [EP&S], trailer manufacturing [TLM], and truck & trailer products & services [TT&S].

The EP&S segment manufactures computerized torque turn monitoring equipment, hydraulic power tongs for land and off-shore rigs, tong trucks, dies and inserts, trailer mounted hydrovac and vacuum tanks, specialized coatings, etc. McCoy says it is the largest independent worldwide manufacturer of hydraulic power tongs. The TLM segment produces lowboys, flat decks, step decks, oilfield floats and specialty trailers. It is also a market leader in manufactured logging trailers for Western Canada. The TT&S segment specializes in equipment installation, suspension work, welding, safety inspections, brake service, alignments, frame straightening, axles and hydraulics for heavy-duty and some light-duty trucks. This third segment is more locally GDP driven than by the oil and gas industry alone.

Complete Story »]]> MCCRF.PK Thomas Tan Silvercorp: Canadian Mining Profits in China http://seekingalpha.com/article/92937-silvercorp-canadian-mining-profits-in-china?source=feed 92937 Silvercorp Metals (SVMFF.PK) is headquartered in Vancouver, Canada, with a sole focus and all its silver mining operations in China. It is China's largest primary silver producer, engaging in the acquisition, exploration and development of silver mineral properties. With its current market cap size of $600M, it is a component of the S&P/TSX Composite Index, the Global Gold Index and the Global Mining Index. And Silvercorp is the only silver producer paying dividend, with the latest announcement of 2 cents per share this quarter.

Several Silvercorp senior managers, Michael Hibbits - VP of Operations; Lorne Walderman - Corp Secretary; and Shirley Zhou - Communications Manager, came to New York City to discuss their strategy and growth potential in China. Traditionally, many juniors only focus on drilling to grow the resource in hopes of selling out to a major. This may not work in some countries, like China, since there is no benefit to the local community and no tax revenue during the years of drilling and feasibility study phase. Silvercorp has a unique business model in the sense that once a discovery is made, then they start development of mining operations even before its full potential is drilled off, then self-fund future expansion of resources and mining operations without further shareholder dilution. This strategy is somewhat similar to Endeavour Silver's operations in Mexico, which I visited and have written several articles about, but the cost structure in China is even lower.

]]> Wed, 27 Aug 2008 14:25:46 -0400 Thomas Tan Silvercorp Metals (SVMFF.PK) is headquartered in Vancouver, Canada, with a sole focus and all its silver mining operations in China. It is China's largest primary silver producer, engaging in the acquisition, exploration and development of silver mineral properties. With its current market cap size of $600M, it is a component of the S&P/TSX Composite Index, the Global Gold Index and the Global Mining Index. And Silvercorp is the only silver producer paying dividend, with the latest announcement of 2 cents per share this quarter.

Several Silvercorp senior managers, Michael Hibbits - VP of Operations; Lorne Walderman - Corp Secretary; and Shirley Zhou - Communications Manager, came to New York City to discuss their strategy and growth potential in China. Traditionally, many juniors only focus on drilling to grow the resource in hopes of selling out to a major. This may not work in some countries, like China, since there is no benefit to the local community and no tax revenue during the years of drilling and feasibility study phase. Silvercorp has a unique business model in the sense that once a discovery is made, then they start development of mining operations even before its full potential is drilled off, then self-fund future expansion of resources and mining operations without further shareholder dilution. This strategy is somewhat similar to Endeavour Silver's operations in Mexico, which I visited and have written several articles about, but the cost structure in China is even lower.

Complete Story »]]> SVMFF.PK Thomas Tan Northgate: Mid-Tier Gold Producer with Strong Cashflow http://seekingalpha.com/article/91699-northgate-mid-tier-gold-producer-with-strong-cashflow?source=feed 91699

Northgate Minerals (NXG) is a mid-tier gold producer with mining operations and resources in Canada and Australia, both geopolitically stable and safe countries. The Company is projected to produce 385K ounces of gold this year and to maintain gold production of 350K-400K ounces in future years. Just like every other junior miner (even though NXG is not a junior), Northgate's stock price has been on a downward trend since late last year, which was traded at one point over $4.50 back in May 2006. This pressure, however, has not been caused by equity financing or risk of refinancing, as in the case of some juniors. In fact, Northgate has not done any equity financing since 2002.

Mr. Ken Stowe, the CEO of Northgate minerals, was in New York City to talk about the Company last Thursday (8/14). Financially, he says, Northgate is very strong right now. With its production estimate of 385K ounces of gold, and average cash cost of $350 per ounce, with today's gold price of $800, It is expected to generate strong net cashflow about $170MM from operations this year, with the latest Q2 report showing $41MM for the quarter. This free cashflow in 2008 is more than a third of its current market cap at $440MM. One reason that Northgate's stock price has been under a lot of pressure for the last two years, besides the slump of the mining sector in general even with higher gold price, is that its major mine of Kemess South will reach the end of its mine life in mid-2011, which accounts for over half of the company's gold production in 2008.
However, Northgate has been very active in acquiring and developing future resources in the last several years. They now have 3 other mining operations ongoing, Stawell and Fosterville in Australia and Young-Davidson in Canada, besides Kemess South mentioned above. The production in Kemess South is expected to be around 200K ounces this year and next, but to decline to 100K in 2010, and reach its end life in mid-2011. However, production on Stawell and especially Fosterville is likely to offset the shortfall in Kemess South, if not more.

]]> Tue, 19 Aug 2008 20:20:32 -0400 Thomas Tan

Northgate Minerals (NXG) is a mid-tier gold producer with mining operations and resources in Canada and Australia, both geopolitically stable and safe countries. The Company is projected to produce 385K ounces of gold this year and to maintain gold production of 350K-400K ounces in future years. Just like every other junior miner (even though NXG is not a junior), Northgate's stock price has been on a downward trend since late last year, which was traded at one point over $4.50 back in May 2006. This pressure, however, has not been caused by equity financing or risk of refinancing, as in the case of some juniors. In fact, Northgate has not done any equity financing since 2002.

Mr. Ken Stowe, the CEO of Northgate minerals, was in New York City to talk about the Company last Thursday (8/14). Financially, he says, Northgate is very strong right now. With its production estimate of 385K ounces of gold, and average cash cost of $350 per ounce, with today's gold price of $800, It is expected to generate strong net cashflow about $170MM from operations this year, with the latest Q2 report showing $41MM for the quarter. This free cashflow in 2008 is more than a third of its current market cap at $440MM. One reason that Northgate's stock price has been under a lot of pressure for the last two years, besides the slump of the mining sector in general even with higher gold price, is that its major mine of Kemess South will reach the end of its mine life in mid-2011, which accounts for over half of the company's gold production in 2008.
However, Northgate has been very active in acquiring and developing future resources in the last several years. They now have 3 other mining operations ongoing, Stawell and Fosterville in Australia and Young-Davidson in Canada, besides Kemess South mentioned above. The production in Kemess South is expected to be around 200K ounces this year and next, but to decline to 100K in 2010, and reach its end life in mid-2011. However, production on Stawell and especially Fosterville is likely to offset the shortfall in Kemess South, if not more.

Complete Story »]]> NXG Thomas Tan Vista Gold: Ready for the Middle Tier http://seekingalpha.com/article/89826-vista-gold-ready-for-the-middle-tier?source=feed 89826 I have owned shares of Vista Gold (VGZ) since September 18, 2007, purchased at $4.75. Like many another junior mining company, it shot up to $8 in early November last year, then has slowly dripped down to the current $3.50 level in the last 8 months. What's interesting is, two years ago, Vista was actually traded at over $13 (pre-spinoff of Allied Nevada Gold Corp) at one point while gold was still around $600. But now that gold is 50% higher, Vista has lost almost 75% of its peak market cap in last the 2 years.

The CFO of Vista Gold, Greg Marlier, was in New York City for a lunch discussion on July 30. Among the things I learned:

]]> Thu, 07 Aug 2008 16:44:22 -0400 Thomas Tan I have owned shares of Vista Gold (VGZ) since September 18, 2007, purchased at $4.75. Like many another junior mining company, it shot up to $8 in early November last year, then has slowly dripped down to the current $3.50 level in the last 8 months. What's interesting is, two years ago, Vista was actually traded at over $13 (pre-spinoff of Allied Nevada Gold Corp) at one point while gold was still around $600. But now that gold is 50% higher, Vista has lost almost 75% of its peak market cap in last the 2 years.

The CFO of Vista Gold, Greg Marlier, was in New York City for a lunch discussion on July 30. Among the things I learned:

Complete Story »]]> VGZ Thomas Tan