West Coast Commentator

GBG –Jump to Mid-Tier Gold Producer!

As a 2002 investor in GBG I have only a year ago seen the $2 again (briefly topping $3.50), before falling hard to $1 again! Even with a great CEO (Ferdi Dippenaar) they ran into all kinds of temporary trouble and had to dilute us out of the window with the recent bottom-scraping share offering. A fool who suspects coincidence!

The conclusion is that even with the best properties and management track record you get f...... as a small investor in gold juniors! Any buyout below my intermediate target of about $10 / share (2-3 years, at full production, and with 3-4 other high grade mines past the feasibility studies - Tsetsera Property in Mozambique, properties in Tanzania and Iturup (Kurils) Islands (Russian Federation), and partly-owned Kryso's Pakrut gold project in Tajikistan) would be a crime and mean that we again got f..... !

Buyers beware - ans holders don't sell below $5 / share!

Great Basin Gold: A Prime Acquisition Candidate

As a 2002 investor in GBG I have only a year ago seen the $2 again (briefly topping $3.50), before falling hard to $1 again! Even with a great CEO (Ferdi Dippenaar) they ran into all kinds of temporary trouble and had to dilute us out of the window with the recent bottom-scraping share offering. A fool who suspects coincidence!

The conclusion is that even with the best properties and management track record you get f...... as a small investor in gold juniors! Any buyout below my intermediate target of about $10 / share (2-3 years, at full production, and with 3-4 other high grade mines past the feasibility studies - Tsetsera Property in Mozambique, properties in Tanzania and Iturup (Kurils) Islands (Russian Federation), and partly-owned Kryso's Pakrut gold project in Tajikistan) would be a crime and mean that we again got f..... !

Buyers beware - ans holders don't sell below $5 / share!

Great Basin Gold: Stock Looks Ready to Move Up

Good point, Sewells: As good as these numbers are, I have waited OVER FIVE YEARS to get my initial investment of $2 per share back, only to get diluted out of the window at lower prices!!! All those exploration stocks SUCK for normal investors, but not for fat cat management, who know exactly when to skim the milk with stock options at basement prices. With all my cudos to Ferdi Dippenaar (excellent mining CEO - looking forward to get a hold of him at the San Francisco Hard Assets Conference this month), the advice to newbie investors is the same, especially in the current gold upswing: THINK TWICE BEFORE BUYING EXPLORATION COMPANY STOCK! YOU PAY DEARLY!

Great Basin Gold: Jump to Mid-Tier Gold Producer

A word of caution: As good as these numbers are, I have waited OVER FIVE YEARS to get my initial investment of $2 per share back, only to get diluted out of the window at lower prices!!! All those exploration stocks SUCK for normal investors, but not for fat cat management, who know exactly when to skim the milk with stock options at basement prices. With all my cudos to Ferdi Dippenaar (excellent mining CEO - looking forward to get a hold of him at the San Francisco Hard Assets Conference this month), the advice to newbie investors is the same, especially in the current gold upswing: THINK TWICE BEFORE BUYING EXPLORATION COMPANY STOCK! YOU PAY DEARLY!

Eldorado Gold: A Cost-Effective Way to Move into Gold

To Slvrizgold: Don't worry (?) about a potential acquisition of JAG by AUY. Yamana buys ONLY WORTHLESS TRASH (Northern Orion and their Agua "Rica" deposit) AT GROSSLY INFLATED VALUES (at or near market peaks). As a long-punished shareholder I can attest to that. Sometimes I just want to yell their stock market symbol: auy!

Jaguar is a different cat indeed - a great growth stock with costs under control and WAY TO RUN. Fortunately I loaded up on them only a month ago and the reward is already bigger (at >30%) than Yamana has provided culmulatively over three years! Buyers beware (of AUY) - stick with the cat (JAG) :-)

David Einhorn Increasingly Concerned About Dollar Crisis, Hoarding Gold

Here is a great commentary on his move: www.marketwatch.com/st...

South African Gold Stocks: No Margin of Safety

WARNING(!): It is just mindboggling to me that anybody would mention the words "South African Gold Stocks" and "Dividends" in the same sentence! These are giant sitting ducks, who sink their beaks, eh billions of Rands of investor money, into the depts of the Witwatersrand, and will NEVER SEE THEM AGAIN! What kind of dividend return can possibly compensate for that risk?

For anybody with even only a peripheral knowledge of what's going on down there it should be clear that they are headed the way of Zimbabwe. Just reading about the political background, plans, and deep corruption involvement of the ANC makes me cringe. That's just a statement, no political or racial slur, and sorry of it comes across as such (no intent). The worst thing is to invest in companies that try to operate deep expensive mines with a large capital investment there (even if they can get the electrical power, that is) - they are at the "mercy" of those folks with a large poor electorate pressing them to "redistribute" the perceived wealth (and who have an addiction to line their own pockets big time).

So - my rule of thumb would be to multiply the expected dividends over the next 5 years by a "factor of safety" of 0.5 (50%), and the ones from 5-10 years into the future by 0.25 (25%), and then subtract the future value of the nationalized hole-in-the-ground (good luck banking on the value of the foreign properties). If the sum is less than what the stock is trading for, FORGET IT!

Exception is Great Basin Gold (GBG, ramping up nicely in Nevada, and the South African property will be a low-cost, low-depth mine, a geological anomaly in that country). BUT: ONLY AS A SHORT-TERM TRADE (<5 years) until they have Burnstone up & running, and with fingers crossed that nationalization does not pick up speed before. And if they are taken out before, TAKE THE MONEY AND RUN. Disclaimer: Long AUY, YAG, GRS, GBG, and MNEAF.PK

Jaguar Mining Can Easily Go Lower

Just to keep it balanced: Here is a link to Friday's PRO article about JAG: seekingalpha.com/artic....

Cannot argee more with what "Mayascribe" said in the comment to that article: "A quick expansion to this article taken right from Jaguar's annual reports is that they have expanded production from 70,000 ounces of gold in 2007, to 115,000 ounces in 2008, and expects to be producing 700,000 ounces in 2014. A ten fold increase in seven years." They know what they are doing and they do it well. Together with their excellent exploration properties (think ) quite explosive mixture for stock market success.

True - every stock ca go lower in the mean time, it's something wonderful we're all waiting for: another great buying opportunity.

Jaguar Mining's Unexplored Territory

To Slvrizgold: Don't worry (?) about a potential acquisition of JAG by AUY. Yamana buys ONLY WORTHLESS TRASH (Northern Orion and their Agua "Rica" deposit) AT GROSSLY INFLATED VALUES (at or near market peaks). As a long-punished shareholder I can attest to that. Sometimes I just want to yell their stock market symbol: auy!

Jaguar is a different cat indeed - a great growth stock with costs under control and WAY TO RUN. Fortunately I loaded up on them only a month ago and the reward is already bigger (at >30%) than Yamana has provided culmulatively over three years! Buyers beware (of AUY) - stick with the cat (JAG) :-)

Exploring Gold Miner Stocks: Mid-Year 2009 Analysis

Some more thoughts on the miners you singled out:

Lihir - forget about the ocean - that thing is on a recent volcano. Steam galore in the pit - just look to the West of the main pit on Google Maps for one plume. Still a world-class deposit and probably snapped up soon.

South Africa - Much much worse than the power crisis (alleviated greatly by the economic collapse) is the new dictator Zuma. Zimbabwe (note the "Z"-milarity) is an example what will happen in South Africa in the next years. Any Rand the miners invest into their deep mines is wasted money. If I was forced to value their stocks, I would multiply their next 5 year's of profits by 50%, from 5-10 years by 25%, and after that by NADA (that's when they will be nationalized at the latest), in order to calculate the PEs. They are actually grossly overvalued! It's like betting against the bank.

Don't worry about Turkey - hey are bending backwards to join Egypt's corn bowl, eh Brussel's subsidies. As a German I refuse that idea. But for investing into EGO it's great news.

Exploring Gold Miner Stocks: Mid-Year 2009 Analysis

Yamana's sale of the San Francisco mine is not surprising, and a testimony to what happens when an investment banker (Marrone) thinks he knows better - for years this property was touted to be a 250,000 oz/year ultra-low cost jewel, only to disappoint once in production. At less than 100,000 oz/year and with production costs above $500/oz - good riddance. As a Yamana shareholder I hope they will do a better job overseeing less mines. But with Marrone you never know - he always overpays at the peak for some crap (Northern Orion). One very good reason their PE lags behind (makes me kringe - why didn't I invest in Kinross instead?).

Are Hedge Funds Missing the Rally?

Markets can stay irrational longer than you can remain solvent (Yoda on another comment). How true.

The S&P Needs to Fall Another 50% Before Stocks Are Cheap

Try to stop that one - now that all indicators jump on the gas pedal.

"Never bet against the market" - the first +30% from the March lows were hard to achieve with this strategy (one cannot pick a bottom AND market direction - I missed that one), but the next +30% are more predictable. Yoda (above) is right, markets can stay irrational longer than you can remain solvent.

Where the Big Money Is Betting Big

You're right on that one, Sonia

But my father-in-law (79 years young, immigrated in the 70's from Eastern Europe) has yet to ask me to help him in that task (repairing his rentals). As a matter of fact, that's what's keeps him busy and in good shape! You must be referring to a more typical U.S. couch potato ;-) No offense. People are different.

But the alternative is the typical U.S. retiree NOT on a government or (exceedingly rare) company pension with an annihilated 201(k), and soon 101(k) when the current bear market rally collapses. These folks will have to work anyway.



On May 16 10:58 AM Sonia wrote:

> Rental property is a goldmine for young people who can do the repairs,
> painting, and cleanup when tenants move out, and put up with the
> hassle. We sold ours in the 90's and are thankful to be out. It is
> not for seniors. Before buying rental property, talk to landlords
> and understand what you are getting into!

Job Numbers from the Bureau of Spurious Statistics

You would be surprised - there seems to be a bottom forming on the housing market here in the "East Bay". Affordability has clearly improved. Sucks that we are stuck in an underwater condominium and cannot refi - well, we'll make up on it. Most professional jobs here pay enough for these prices. No doubt about it. And I would rather bet on a turnaround here than in, say, Detroit. Too many young couples sniffing around the open houses in our community (especially Asian, with BMWs and similar status symbols).


On May 08 01:48 PM PastTense wrote:

> But how many of these 4,375,000 jobs are good jobs? And how many
> pay enough to buy the average new house in California?