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  • Osisko Gold Royalties: This New Royalty/Exploration Company Is A Compelling Speculation Stock [View article]
    Thanks for an excellent article. I bought some Osisko when the acquisition terms were announced and have used the AUY and AEM shares received plus the cash to position some OKSKF for the long term. The value of the 5% Canadian Malarctic royalty is unassailable and the 2% NSR on the other properties could also be interesting. The Guerrero gold belt land package is huge and very promising as well. Having the cash to explore it makes this an exciting prospect. A question for you... Do you have a feel for whether or not OKSKF's management will use some of the $150+/- million in cash pursue acquiring other royalties or streams in order
    to build a royalty portfolio such as Sandstorm is doing? Does the management team have this capability?
    Jun 29 08:11 AM | 2 Likes Like |Link to Comment
  • Silver Wheaton: Free Cash Flow Could Double In 2 Years [View article]
    What are the silver price assumptions used in the projections? Thanks for your good work.
    May 15 06:57 AM | Likes Like |Link to Comment
  • Bakken Update's 2014 Stock Picks: Fraccing Fluid Producers [View article]
    Michael: Any thoughts on propane fracking? The Terrace Energy (TCRRF TCR.V) website has a press release about successful completion/ re-completion in the Eagle Ford using LPG fracking where water based fracs had failed. An excerpt from this PR:
    "Chittim Heirs 2-H was drilled to a total depth of 9,389 feet, including a 4,100 foot horizontal lateral section, in the Lower Eagle Ford Shale. The well was completed in 15 stages using hydrocarbon-based hydraulic fracturing fluids. During the first 15 days of flow-back testing, using 5 ½” casing, the well produced more than 11,500 barrels of oil, which is approximately 765 barrels of oil per day, and minor amounts of associated gas. There can be no assurance that the flow rate will stabilize at current levels over time.
    This successful use of hydrocarbon-based fracturing fluids represents a significant advancement in the development of the Eagle Ford Shale in the “black oil” window, which is defined by low gas-oil ratios found in the northern extension of the formation. Previous attempts, by other industry participants to develop commercial production in the black oil window of the Eagle Ford Shale, were made using high volume water-based fracturing fluids. This technique has generally not been commercially successful, despite the formation’s rock properties and hydrocarbon content, because the formation’s shallow depth and lower reservoir pressure make it difficult to recover and unload the large volumes of water used. Testing results to date indicate excellent formation productivity and there is no evidence that water resides within the formation."

    This is a large Eagle Ford project and Terrace Energy's partner in the project, Blackbrush (a private San Antonio company), is shown as a customer of GasFrac's LPG fracking services in the Texas market. Is LPG fracking being leapfrogged by the other new fracking fluid technologies? Thanks.
    Feb 12 09:39 AM | Likes Like |Link to Comment
  • Ready For Rare Earth Rebound In 2014? [View article]
    One seemingly overlooked (and no doubt highly speculative) stock in this field is Texas Rare Earth Resources (TRER $.50). The company recently released a Preliminary Economic Assessment (PEA) linked here:

    This is a link to a December 4, 2013 Company Presentation:

    37 million shares outstanding, and at $.50 per share, a market cap of about $18.5 million. Insiders (management) are shown to hold about 38% and institutions about 9%. Jack Lifton, considered an authority on rare earth investments, recently joined the TRER board.

    The Company has a rather large heavy rare earth element (HREE) deposit in West Texas, 85 SE of El Paso, three miles from IH 10 with rail and electricity nearby. The PEA indicates $297 million of capital expenditure will be required. According to the PEA, based on current HREE prices, projected revenues from the first 20 years of mining are about $7.9 billion and that about $2.2 billion of operating expense will be required over the 20 years. (The 20 year initial mining period is indicated to be a relatively small portion of the mineral resources the Company believes to be present at the site). A net present value discounted at 10% is projected by the PEA at $1.47 billion, and an Internal Rate of Return of 69% (1.5 year project payback).

    According to the PEA, a low cost heap leach (dilute sulfuric acid) mining technique will be feasible. Since the deposit is largely above ground level, in the form of a "mountain," some of the costs and risks of typical underground mining may be avoided. Texas is a natural resource development friendly state and has a 6.25% royalty interest in mining revenues.

    With the stock at around $.50 and required cap ex indicated at $297 million, (or about $8.00 per share based on 37 million shares) there seems to be substantial risk involved. But perhaps some "optionality" as well.
    Dec 28 10:55 AM | 4 Likes Like |Link to Comment
  • Brigus And Primero: A Match Made In Mining Heaven? [View article]
    Good article, thanks Steve. Bayfield Ventures, BYV, looks like an ideal acquisition for NGD. Bayfield's deposit situated "within" the proposed Rainy River pit appears to be a must own for NGD when it develops RR. Recent BYV drill results have been very good. Any thoughts on this one?
    Dec 17 08:14 AM | Likes Like |Link to Comment
  • Bakken Update: Estimated Ultimate Recoveries In The Permian, Part 2 [View article]
    Further re Cline Shale:

    What factors should one consider in comparing the prices paid per Net Mineral Acre by Sumitomo in its purchase from Devon and by Sinochem in its purchase from Pioneer?

    Pioneer sale to Sinochem:

    Devon sale to Sumitomo:

    In Sep 2012, Sumitomo paid $1.4 billion for a 30% interest in Devon's 650,000 acre Cline Shale play, or $1.4 billion for 195,000 NMA, or $7,179 per acre. In late Jan 2013, Sinochem paid $1.4 billion for a 40% interest in Pioneer's 207,000 Wolfcamp horizontal play, or $1.4 billion for 82,800 NMA, or $20,531 per NMA. Why the difference in price (Pioneer's acreage almost 3X what Devon's acreage brought)?

    Before the Cline Shale was named "Cline Shale" it was known as the Lower Wolfcamp or the Cisco, so it seems reasonable to assume that Pioneer's Wolfcamp play may be quite similar to Devon's Cline Shale. There seem to be similarities in deal structure (who pays what when?) as well. Pioneer's acreage may be more de-risked than Devon's. There is also the time factor or the "maturing nature" of the opportunity, Devon's sale having been made in Sep 2012 and Pioneer's in Jan 2013. What are some of the other differences that might have been in play that explain the nearly 3X higher price?
    Many thanks..
    Feb 17 08:40 AM | 1 Like Like |Link to Comment
  • Bakken Update: Estimated Ultimate Recoveries In The Permian, Part 2 [View article]
    Very good articles Michael. Hope in the third installment you will go into the emerging Cline Shale (lower wolfcamp) on the Eastern Shelf of the Midland Basin. As you probably know, Devon and Pioneer have recently made sales of a percentage of their acreage to Sumitomo and Sinochem:

    Pioneer sale to Sinochem:

    Devon sale to Sumitomo:

    Devon has reported some pretty heady expectations for the Cline, as are detailed in the discussion of its sale to Sumitomo above.
    Thanks for your good work!
    Feb 16 11:09 AM | 1 Like Like |Link to Comment
  • Silver Wheaton Is A Buy On Recent Weakness [View article]
    Excellent article. Two questions for you. 1) In the chart comparing SLW's reserves and resources to the other silver companies, how were SLW's reserves and resources calculated? Did you use only SLW's attributable amount of its "partner companies" reserves? In other words, if a company has 10 moz of reserves and SLW has a right to a 10% stream, would 1 moz of these deemed to be SLW reserves? 2) How did you arrive at a 36% growth rate in calculating PEG? Growth from 28 moz currently to 48 moz in 2016 does not seem to be 36%. (And keeping this high a rate of growth going in perpetuity seems unlikely.) Keep up the good work. Many thanks.
    Jan 30 06:49 AM | Likes Like |Link to Comment
  • 4 Dividend Paying Silver Companies [View article]
    Good article. Thanks. One little understood "silver play" with a high dividend yield (4.3%+/-) is Gold Resource Corp. (GORO). Well over half of GORO's precious metals revenues come from silver. Further, management has indicated plans to begin active exploration of its Las Margaritas project which, according to the "projects" section of the company website has had historical indications of silver ore in the thousands of ounces per tonne. If drilling at Las Margaritas establishes a large high grade silver deposit better recognition of the company's potential as a silver producer could occur. GORO has missed projections recently causing a sharp drop off in share price and attracting a lot of short sellers and other negative sentiment, but there are positive opinions out there as well. The current dividend is $.72, payable $.06 per month, and management has indicated its intention to adjust the dividend payout in step with mine profits going forward. Long, and biased toward the positive..... do your own research.
    Dec 9 08:52 AM | Likes Like |Link to Comment
  • Gold Resource (GORO) declares $0.06/share monthly dividend, in line with previous. Forward yield 3.41%. For shareholders of record Oct 10. Payable Oct 23. Ex-div date Oct 08. (PR[View news story]
    A very interesting and perhaps not commonly understood aspect of GORO is that its silver production is a bigger factor in revenues than its gold production. Management has also indicated a plan to more actively explore its Las Margaritas project, on which some extremely high grades of silver ore have been found. Recognition that GORO is a play on gold AND silver could help the stock if silver continues to outperform.
    Sep 27 08:53 AM | Likes Like |Link to Comment
  • 5 Stocks For A Well-Rounded Natural Gas Portfolio [View article]
    Timely article, Simit. Thanks. Regarding LNG, do you have any thoughts on a way to play the business of using FSRUs or free standing (or free floating) re gasification "plants" to receive LNG and deliver it to pipelines?
    Jun 13 08:23 AM | Likes Like |Link to Comment
  • Eagle Ford In The Maverick Basin [View article]
    Great work, Michael. Do you have any thoughts on the possible extension of Eagle Ford activity north in Fayette County to the LaGrange/Giddings area? The Giddings field was a highly prolific Austin Chalk area a few decades ago and there has been some significant Edwards production there as well. Hard to tell from your maps as to how thick the Eagle Ford might be in this area. Many thanks.
    Apr 19 11:03 AM | Likes Like |Link to Comment
  • Gasfrac Energy: Fractured Dreams And The U.S. Potential [View article]
    Good article, thanks. Could you provide the source of the dollar size of the Husky contract mentioned? I find several press release references to the Husky contract but no mention of what it might be worth to Gasfrac in terms of annual revenues.
    Apr 17 07:28 AM | 1 Like Like |Link to Comment
  • Gold Resource Looks Cheap, But Not Without Risks [View article]
    I totally agree with "pmguru" and am pleased to be long a stock that, in one investment, offers exceptional leverage to both the gold and silver price, and to the financial gearing that will occur in the miners when metals prices rise and mining costs stay relatively flat. Disagree with (keepshortsighted), who, as usual, seems to be looking backwards at GORO when it was in an embryonic state before a highly successful ramp up.
    Jan 25 07:43 AM | Likes Like |Link to Comment
  • Gold Resource Company: Great Growth, Good Dividend, Low Cost Gold Production [View article]
    Another interesting aspect of GORO is its silver production, which in terms of dollar value exceeds its gold production. If Sprott Asset Management and others are correct and silver offers greater upside potential than gold, this could enhance GORO's future performance. Some of the company's indicated projects, Las Margaritas for example, have shown bonanza grades of silver. The company's website quotes a 1905 Mexican Government publication in regard to Las Margaritas as follows: "...the place in which has been found some of the richest ores in Mexico, some of the ores having reached the value of 18,000 ounces to the ton, and ores are frequently found which assay 4,000 to 5,000 ounces to the ton." This may be too glowing a description, but nonetheless the company shows some intriguing Las Margaritas rock chip samples on its website, including:
    6.29 g/t AU and 4,150 g/t Ag
    5.25 g/t AU and 2,000 g/t Ag
    7.76 g/t AU and 1,850 g/t Ag

    Manangement indicates that the next project for development may be its El Rey deposit which has had drill intercepts of high grade gold including:
    1 m of 132.5 g/t Au
    1.4 m of 55.3 g/t Au
    9 m of 19.4 g/t Au
    According to the website, an existing shaft at El Rey is being extended and refurbished and development drilling is ongoing. If results are good enough, the plan is to truck high grade ore from from El Rey to the La Arista mill for processing. According to William Reid, Chairman, production of gold from El Rey, if and when developed, could add meaningfully to GORO's results without large capital costs.

    One of the knocks on GORO is that it does not yet have a 43.101 reserve report, which many consider necessary before making an investment. Management indicates, however, that such a report should be available in Q1 2012.
    GORO shareholders and their approximate percentages of ownership as of the January 2012 company presentation include:
    Management ~ 19%
    Hochschild Mining ~ 28%
    Tocqueville Asset Management ~ 8%
    NFJ Investment Group ~ 6%
    Blackrock ~ 5%
    Oppenheimer ~ 2%
    Vanguard ~ 2%
    Such investors typically do not act without first performing due diligence. I have been a shareholder of GORO since January 2008.

    Jan 19 08:23 AM | 3 Likes Like |Link to Comment