Seeking Alpha

Trey Wasser

View as an RSS Feed
View Trey Wasser's Comments BY TICKER:
Latest  |  Highest rated
  • Solitario Exploration & Royalty: Think Zinc - Impending Shortage Could Lead To Big Gains [View article]
    Great piece on Solitario. I might add that the Bankable Feasibility Study for Mt Hamilton, thus the NPV, only included the Centennial reserves of 545,300 ounces of gold equivalent. The optimized scenario (under review) with increased production and an extended mine life includes the Seligman pit and total resources now stands at a combined 772,200 GOE (M&I resources @ $1200 gold and $22 silver). While the BFS did use $1323 for a gold price, it was based on $1600 for year one, $1400 for year two and $1200 for life of mine. Also of note is the sensitivity analysis released last fall. The resources at Mt Hamilton change very little even using an $1100 pit shell. Permitting is in the final stages. Financing interest in this project is supported by the fact that Sandstorm has already invested $10MM into a 2.4% NSR which funds the Partnership through 2015. RMB has also invested via a $5MM corporate line to Solitario.

    Like Solitario at Bongara, Ely Gold is full carried for our 20% interest in Mt. Hamilton. Ely Gold also owns 100% of the Green Springs project 10 miles south of Mt. Hamilton.
    Feb 24 12:39 PM | Likes Like |Link to Comment
  • Allied Nevada: Solvent In The Short Term, Risky For The Long Haul [View article]
    The inventory on the leach pad is the gold that has not yet been recovered in the leach process. Generally, the auditors will allow the " inventory" to be defined as the gold on the leach pad that should ultimately be recovered (over the life of mine) according to the recovery percentage used in the feasibility study. For example, if 1MM tons of ore are placed on the leach pad at a grade of 1 gram per ton and life of mine recoveries are 75%, about 25,000 ounces of "recoverable" gold has been placed on the pad. If 20,000 ounces are produced, this results in 5,000 ounces of inventory. Good ore will recover 80% of the "recoverable" gold in the first 90-120 days. the rest comes out at a trickle. Of course, more ore is placed on top as "lifts" are added to the leach pad. The first 1MM tons sees much less pure cyanide solution as the upper lifts are loading up the solution. Silver complicates things as it is also loading the solution. The life of mine recoveries are based on metallurgical testing by various methods. The column tests are meant to replicate the leach pad, but don't consider bad stacking, compaction and poor leaching practices. An ideal leach pad might be 1-2" so that good leaching can occur on the bottom lifts even as the pad is 8-10 lifts high. In the ideal case, most of the inventory will eventually be recovered when the pad is "rinsed" in the last few years of mine life when no new ore is being added.
    Even in the best circumstances, there are issues with the pad. ANV has had more than their share of problems mainly the poor leaching practices which led to low recoveries (and higher inventories). Only time will tell if the dry spots in the pad can still be recovered. Now the finer crush might help recoveries in the lab, but it may also lead to problems on the pad with solution not getting through the lower lifts.
    Anyway, it is doubtful that ANV will be recovering a substantial amount of the "inventory" in the near term.
    Dec 26 10:30 AM | Likes Like |Link to Comment
  • What It Really Costs To Mine Gold: Allied Nevada Gold At A Crossroads [View article]
    Great job Hebba. (As usual)
    A couple of comments. Heap leach gold producers book gold ounces placed on the pad, but not yet recovered, as inventory. These are ounces they expect to recover based on the life of mine recovery projections from the feasibility study. Most of these ounces, if recovered, come at the end of the mine (or pad) life when ore is no longer being placed on the pad but the pad continues to be rinsed. So you are absolutely correct in that these are not liquid assets.
    ANV had issues with the Lewis pad not being properly leached in late 2012 and early 2013. The issues are discussed in some detail on the Q2 conference call. They hope to recover 70,000 ounces from the "dry" areas of the pad by drilling wells and introducing solution to the dry areas. This will also allow solution being applied to the current lifts to leach through. They are confident they can save the pad, but this is very tricky.
    Gold recoveries for Q1 & Q2 2013 have been about 36% vs about 54% in 2012. Recoveries were projected at 56.6% for the run of mine ore. They have now installed the crushers to increase recoveries, Hopefully to 63%. But the finer ore could cause more leaching issues.
    Gold grades for Q2 were .010 OPT but the proven & probable heap leach reserves have a grade of .007 OPT so grades will decline further over the life of mine.
    Aug 12 04:53 PM | 4 Likes Like |Link to Comment
  • Sandstorm Gold: Where Will The Growth Come From? [View article]
    Good work Steve. I think the SAND articles on SA and ensuing comments are some of the best anywhere. Your previous work, and articles by Chris Davis, , and Hyperinflation, having taken the bull case while CDM Capital,, takes the bearish view. The comments generated are, for the most part , very constructive and show good additional insights into SAND and their investments. Clearly, this remains a challenging environment for the juniors to develop projects and CDM is right that some may not meet SAND's original production targets. While I can't speak for other companies, I can say that at Mt Hamilton LLC we have used the Sandstorm NSR monies to substantially increase resources,, and advance permitting,
    Mt Hamilton LLC is currently funded for our estimated Partnership budget for 2013 & 2014. This will include all final permitting and an updated feasibility study which will incorporate the expanded resource. Financing will remain challenging, but we are working hard to enhance the economics of Mt Hamilton and deal with the lower gold prices.
    Aug 5 01:46 PM | 4 Likes Like |Link to Comment
  • COMEX Gold Inventories: Every Top-200 Hedge Fund Can Buy All The Registered Gold At The COMEX [View article]
    As usual a very good report, Hebba. I would however, like to point out a couple of things.

    1. Inventories at COMEX have historically been a function of price. Higher prices tend to bring gold out of vaults, increasing inventories while lower prices stimulate additional purchases by central banks and long term investors of physical gold. Falling inventories will be much more significant if they continue dropping with higher prices. Note that the long term chart of gold inventories looks exactly like the long term gold price chart.

    2. The total hedge book of producers has dropped dramatically as 32 mismanaged gold miners reduced hedges by 11 metric tonnes in Q1, just before prices dropped. The total worldwide hedge book is 1/3 of what it was at this time last year and stands at 112 tonnes, the lowest since 2002. This is a reduction of over 200 tonnes in the past 12 months. This pace continued in Q2, with over 17 tonnes closed out as of this week. Another reason for the sharp decline has been the lack of new hedges for mine financing in the past 12-24 months. Most producers would have delivered registered metal to the COMEX if the contracts had not been closed out.

    3. For the most part, COMEX is already pretty irrelevant in the big picture. Central banks bought 180MM tonnes of gold in the first 5 months of 2013. This is after buying some 476MM tonnes last year.

    So a drop of about 128MM tonnes at the COMEX is not surprising and not yet a reason for alarm.

    4. Negative GOFO rates continue out to three months. However, comments in the press that make comparisons to the Lehman collapse and the global liquidity crisis are a bit overblown. In 2008, LIIBOR was 3.5-4%. Today 3 month LIBOR is only .32%. Given that short rates are close to zero, the negative GOFO rate is more likely a reflection of someone wanting to borrow $US to invest in our stock market or another arbitrage, than a true liquidity crisis or issues with leased gold.
    Jul 31 01:19 PM | 1 Like Like |Link to Comment
  • How Safe Is Sandstorm Gold? [View article]
    Excellent article. Well researched.
    Jul 6 07:53 PM | 1 Like Like |Link to Comment
  • Why Sandstorm's Exceptional Value Makes It My Top 2013 Gold Stock [View article]
    I agree with you totally on SAND. But, according to Magellan's
    financials, the full amount ($7.5MM) of the Magellan NSR's was paid in Q2 2012. I can't speak to the details of the Magellan NSR'S but Ely Gold (and Solitario) have filed the Sandstorm NSR for Mt. Hamilton LLC. (Ely Gold filed it on SEDAR August 28, 2012) If you read this document you will see that it includes a "cash flow guarantee". This insures that SAND will be returned their original $10MM in 10 years or we owe them the difference. This is not a re-payment, but protects them against delays and falling gold prices. In the case of a failed project they get their money back. In our case, this "Cash Flow Guarantee" is added incentive to do a stream and buy back the NSR.
    Mar 29 11:06 AM | Likes Like |Link to Comment
  • Why Sandstorm's Exceptional Value Makes It My Top 2013 Gold Stock [View article]
    Another example of going out the risk curve would be the Magellan Minerals NSR's done at the same time we sold them the Mt Hamilton NSR in 2012. Coringa had only a PEA and Cuiu Cuiu only a resource. Both are very good deposits and the Magellan guys are very experienced in Brazil. These deposits are long ways from feasibility. But, I am sure Nolan and his crew believe these deposits will both get much bigger.
    Again these are smart guys at SAND. Sometimes aggressive and always do their homework. I think this type of earlier stage deals might be forwarded to Premier Royalties in the future.
    Mar 28 01:11 PM | 1 Like Like |Link to Comment
  • Country Risk For Mining Jurisdictions - March Edition [View article]
    I base this on 2011 gold production rankings here:
    And BLM statistics that would rank Nevada 6th behind China, Australia, all of the US, Russia and South Africa.
    Greenland, Finland and Sweden, who are ahead of Nevada in Figure 4 of the Fraser Survey are not even a top ten gold producer.
    Of course, I am also biased to Nevada Gold.
    Mar 28 12:50 PM | Likes Like |Link to Comment
  • Country Risk For Mining Jurisdictions - March Edition [View article]
    I suggest anyone interested in worldwide mining risk should download the new Fraser Institute Survey here: For me, the most interesting ranking is "Mineral Potential assuming current Regulations and Restrictions". Nevada is #4, but would likely be #1 if this survey referred only to gold.
    Mar 28 12:04 PM | Likes Like |Link to Comment
  • Why Sandstorm's Exceptional Value Makes It My Top 2013 Gold Stock [View article]
    Another great article on Sandstorm. Hyperinflation's "Adding Value..." article last week was also excellent work. Sandstorm may be going out the risk curve with some of their investments, but these are exceptionally smart guys who understand risk/reward very well. And, as Grumblefti has pointed out, the structure Sandstorm uses in all their deals helps to manage risk.
    Mar 27 01:53 PM | 1 Like Like |Link to Comment
  • Gammon Trumps Timmins' Offer for Capital Gold [View article]
    What you fail to see is that the Timmins Gold offer was not a $4.50 bid price, but an exchnage offer for 2.27 shares of TMM for every share of CGC. The market has apparently realized more inherent value in the Timmins/Capital transaction because TMM shares have risen since the announcement.TMM closed on Friday at C$2.17giving an exchange value for CGC of C$4.93 or US$4.78. This hardly makes the Gammon deal superior given that GRS shares dropped to US$6.83, putting their offer at closer to US$4.37. There is also some tax implications to the cash componenet of the Gammon offer that could cost shareholders an additional $.25.
    Oct 3 10:23 AM | 2 Likes Like |Link to Comment
  • Geologix Explorations: Another Mexican Monster Miner? [View article]
    You may be correct. Clearly GIX will not finance this project themselves. But, they have done everything right in developing the asset to date. They have not wasted shareholders equity like the lot you are casting them with. San Agustin may be a very attractive project for a major mining company looking for significant deposit for development in Mexico.
    Sep 24 12:28 PM | Likes Like |Link to Comment
  • Crystallex's Speculative Shine Begins to Tarnish [View article]
    A message to KRY shareholders.
    I happen to agree with Mr. Bane and appreciate his work. One reason why I started to publish my due diligence on SA was my frustration with message boards on individual stocks. The message boards have become nothing but a place for longs to hold hands and perform their cheerleading routines. Anyone who actually does due diligence, like really reading the SEC filings, does comparative valuations of similar companies, or otherwise reveals negative aspects of a stock, is labeled a basher (or worse) and discounted completely. I salute Mr. Bane for his work as he has obvioulsy done his homework and has expressed his opinion very diplomatically. Anyone who disagrees with him should suppport their view as concretely. Better yet, write your own report on why KRY is such a great value and have the guts to submit it for publication. I wrote a report comparing GRZ and KRY. Just because you are long the stock is no reason to belittle Mr. Bane. You should appreciate someone pointing out the negatives, then do your own research. Anyone who believes that KRY is all about a PERMIT, is simply wrong. KRY is extremely overvalued for what they actually own (or don't own). The MOA has a real problem with no copper production. Leaving the copper in the waste rock will be an environmental nightmare. For this reason, I believe the permit is a long way off and the MOA will have to be renegotiated. Financing will be a real problem for a project in Venezuela that does not inlcude actual ownership of the reserves. There is a reason for the revolving door at KRY headquarters. Ask yourself, why is KRY selling at 4 to 5 times the enterprise value of GRZ? I believe, the answer is that many of those willing to buy or hold KRY at today's price are not doing their homework. Even worse, they are discounting those that do. Mr Bane and I may be wrong about KRY, but that is what makes markets.
    Trey Wasser
    III-D Capital
    May 31 09:30 AM | Likes Like |Link to Comment
  • Why Gold Reserve, Not Crystallex, is the Better Bet in Venezuela [View article]
    I mentioned the offering in the article.
    May 11 03:28 PM | Likes Like |Link to Comment