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  • SilverCrest Mines - This Beaten-Down Stock Holds Promise [View article]
    The open pit was the bread and butter high quality part of this operation and that phase is on its final legs.

    I think this is a sell into strength on the production windfall from both sources of OP and UG ore. I agree the costs should fall once stopes are developed given the costs associated with the UG development has hurt AISCs the past few quarters which is a temporary catalyst but that figure will creep back up again a year from now once their open pit ore is fully processed.

    Looking forward I really think the UG portion of this mine is of only average quality and many average operations trade at a discount to book value.
    May 9, 2015. 01:04 PM | Likes Like |Link to Comment
  • Why Is It The Right Time To Buy Nevsun Resources [View article]
    For the record I took some money off of the table.

    Nothing new here it is a high quality operation and it is cheaply valued on an EV basis but the copper grades will continue to decline throughout the year and the big dragging issue is the company already hit its peak in earnings during the gold phase and I have calculated it will take zinc to surpass 1.50/lb and processing their highest zinc grades just to match 2014's earnings.

    Unfortunately, in this challenging environment for the sector it also takes production/profit growth for a miner to really outperform and sustain momentum.

    Part of the reason why the value suffers here because its cash on the balance sheet makes no return and the firm has yet to make an acquisition to grow the company and derisk its sole concentration of cash flow because of its obtuse "parameters" for an acquisition. (NSU is not the best value out there in the space).

    I think from a timing perspective you are going to get a better opportunity again because copper grades in the supergene ore will continue to fall as time progresses until they commission the zinc plant.

    I think 2016 will likely be a good year for Nevsun however, just on the premise of a continued rise in zinc prices and the inventory of shares of pure play zinc producers are very limited in supply but earnings will likely not exceed 25 cents in 2016.
    May 7, 2015. 06:41 PM | Likes Like |Link to Comment
  • MGP Ingredients Could Keep Going [View article]
    I also found it quite odd there hasn't been an article here until now.

    Been long here since the 2013 harvest. MGPI has enjoyed a great crush spread since the 2013 harvest and fuel ethanol had been the major driver in 2014 which you did not mention in the article they own an equity interest in a fuel grade ethanol plant in IL but the distillery provides a stable sales base that has also benefited from the crush spread hence the reason of the continued resiliency of the stock price compared to other users of corn to produce ethanol.

    Much like Steve I have been a seller here for the same reasons. Higher tax rate and more risk of margin declines.
    May 7, 2015. 05:45 PM | 1 Like Like |Link to Comment
  • The Oil And Solar Divergence Does Not Make Sense [View article]
    My observation is stock prices are blatantly politically manipulated in all directions many sectors impacted and it is much more obvious during this bull market. In the case for oil supply fundamentals were ignored for years until Putin became rogue. Gold prices were manipulated lower because it undermined the dollar. Coal as a fuel is anti EPA and as a result the industry is becoming obsolete. For profit education has been questioned on the viability of the effectiveness of student loan repayment and that sector has been decimated. OTOH companies that are pro government in aiding of their spying like FB near record highs.
    Apr 16, 2015. 01:16 PM | Likes Like |Link to Comment
  • John B. Sanfilippo: Severely Mispriced With Significant Near-Term Upside [View article]
    I still remain cautious because on a historical basis the stock price is well beyond all time highs on a price/sales ratio. If you look at the data typically the valuation would peak at .3 times sales in this commoditized business. So I think the sector is in a major bubble. On a comp basis this stock is cheap but herd investing is not my style.

    Obviously, these high valuations are due to the nirvana conditions in the food processing industry in general with low borrowing costs and the business has been able to maintain historically high margins from low commodity prices, shrinking their product sizes and very high selling prices using regional drought and shortages as an excuse for it even though it is very easy to procure commodities at low prices .
    Mar 30, 2015. 12:43 PM | Likes Like |Link to Comment
  • Afren Plc.: ~$112mm Of Equity Value About To Be Wiped Out [View article]
    I agree the stock is nearly worthless to current equity holders.

    They certainly did a super job covering up the fraud ongoing at this company with the non performing asset in Kurdistan where they actually paid a 30 million dollar donation/bribe just to get the concession and then hid the problem for quite some time. Past management bails out by creating a diversion of receiving payments and then the new management does really nothing by playing totally ignorant and in effect pardoned them when they paid back the slush money but the company never disclosed the scam of the nonperforming asset for years.

    I still don't know how they could burn through that much cash in just one quarter without any attempt to salvage the company at an earlier date and I am also still quite puzzled their hedge was also worth approximately 350 million was never monetized. It could at worst bought it could have bought them time to raise equity at a relatively decent price.
    Mar 6, 2015. 11:50 PM | Likes Like |Link to Comment
  • Renewable Energy EPS of $1.61 [View news story]
    Funny how numbers can be spinned. I highly doubt the consensus estimate included the value of the tax credit of $1/gallon. Value of the blenders credit is 95 million or 2.25/share. So the Q4 operating loss technically was approx 63 cents.

    Guidance for Q1 2015 is a 10-30 million dollar loss. .23-.69 loss range. So the company can tolerate 56 cent quarterly losses to break even assuming same rate of production.

    This really a quirky company to figure out from an investment end because operations are showing losses and then back ended to the blenders credit and the reason why this trades at such a discount to book value but I can see the appeal on any improvement on industry fundamentals if the BTC is expected.
    Mar 3, 2015. 07:27 PM | 2 Likes Like |Link to Comment
  • Update: Nevsun Doubles The Size Of Its Indicated Resources, Inferred Resources Grow 18-Fold [View article]
    I am curious why you like GORO other than the ability to potentially receive your dividend in Au or Ag coins. The stock is not cheap and P/P reserves are like a year and a half. Even though they have potentially extended mine life with new drilling results AISCs are likely to substantially rise to get access to the new stopes provided it is economic to do so.

    With regard to NSU yes its peak earning years from Bisha are past them but it is likely going to perfectly time the zinc cycle.

    If you look at NSU on an EV basis however its future earnings remain heavily discounted with 14 years of open pittable mine life remaining excluding any potential from an underground operation which should start to become be delineated in 2015.

    I see you like GTE for its balance sheet strength think of NSU is the GTE of mining but even better yet pays you a return (dividend) to hold shares.
    Feb 20, 2015. 12:09 AM | Likes Like |Link to Comment
  • Agnico Eagle Outperforms Gold Peers, Expects To Produce 12% More Gold In 2015 [View article]
    Assuming you are going to strictly stick with acceptable jurisdictions to AEM and gold only. Aura and Claude look ridiculously/comparati... cheap to me and both have turned around/restructured operations.

    Aura is expected to show a large impairment charge in Q1 but even with the charge the remaining book value is still going to be 50 cents a share. Its EV/EBITDA for 2015 at 1200 gold is less than 1 even with its carried debt load and the firm will be LT debt free in 2016.

    Claude should show net earnings of 10 cents a share US implying a 3 PE. Claude has outperformed AEM in 2014 since its recovery has been much more obvious and well under way for a few quarters.
    Feb 19, 2015. 11:43 AM | Likes Like |Link to Comment
  • Agnico Eagle Outperforms Gold Peers, Expects To Produce 12% More Gold In 2015 [View article]
    I have never understood why this firm has not been aggressively acquisitive of smaller profitable one mine operations that show a consistent similar aisc cash cost profile using their stock as the medium of acquisition. No other gold miner receives such a rich premium .
    Feb 18, 2015. 06:59 PM | Likes Like |Link to Comment
  • Oil supply will outpace demand for years, BP predicts [View news story]
    I agree this oversupply argument is stupid. Markets have always been in oversupply. Saudi Arabia always had trouble marketing heavier crudes and Cushing has been awash in oil which explains the 10-15% discount of gasoline prices in the midcontinent region.

    Prices have been rigged to stay artificially high for quite some time ignoring supply/ demand fundamentals to spur development of higher cost energies be it conventional or green .

    Oil prices in this instance were deliberately dropped for political reasons (to punish Putin's economy) that happened to become exacerbated by the convenience of this condition by Saudi Arabia's refusal to cut production to potentially curb additional development of marginally economic crude supply.

    Since it appears Putin is behaving for now I think prices will continue to slowly recover barring an economic depression lurking on the horizon.
    Feb 18, 2015. 10:42 AM | 1 Like Like |Link to Comment
  • Nevsun Resources: Substantial Upside In Eritrea With A Huge Margin Of Safety [View article]
    This is also my largest mining position. Solid balance sheet and one of very few companies financially able to capitalize on the woes in the sector.

    Can't quibble holding when you can buy shares at or below book value at a decent yield.

    Other than a few minor tactical issues I disagree with management like Davis' comparatively high compensation, the lack of mine diversification and lack of hedging this company is the Ferrari of one mine operations given its quality.

    For one I am not a big bull in copper because the subsector has enjoyed prices above all in costs until very recently. Cu producers hasn't undergone any long term pain and suffering endemic of the other metals. Zn for instance it has been long 7 years the price has been below the P50 cash costs until this year.

    I also believe most of the state Chinese buying is being stockpiled off the books as a hedge against the dollar and not being consumed.
    Feb 3, 2015. 02:56 PM | 1 Like Like |Link to Comment
  • Update: Aura Minerals Continues To Turn Around - Q3 Results Were Very Strong [View article]
    Tim since you have much influence in the board room why not suggest a share buy back should the share price stagnate. Shutting down their achilles heel in Aranzazu and was the event for my investment dollars. At $1200 gold they should now generate 42.7 million in annual EBITDA and at $1300 gold the number rises to 54 million in annual EBITDA with their hedge kicking in at $1206 at their low end of production guidance and high end of cash costs.
    Jan 22, 2015. 09:25 PM | Likes Like |Link to Comment
  • Update: Aura Minerals Reports Strong Production At San Andres [View article]
    I have been a recent buyer of shares on the same premise of anticipated forward valuation at current prices of approximately 1 time EV/EBITDA which is very cheap IMO.

    I am also hoping the industry guidance remains conservative and has tempered the positive impact of lower oil prices in expectations.
    Jan 21, 2015. 11:09 AM | Likes Like |Link to Comment
  • Koven: Many reasons for takeover interest in Nevsun, and one big negative [View news story]
    The Eritrea issue is really overblown other than for a great opportunity to scale into the company. I think the risk of a nationalistic communist coup is zero. Arabs don't believe in communism. A coup with a capitalistic doctrine will continue to honor the lease. Centamin Egypt had a similar regime change twice in a period of 2 years and the company is still intact and the stock is about the same price it was before all of the political changes and this is under fundamentals with much lower gold prices.

    The bigger fear is the EPA in good ol' USA. It has virtually dismantled the coal industry to nonexistence.
    Dec 19, 2014. 10:59 AM | Likes Like |Link to Comment
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