Jason Burack

Jason Burack
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  • Sizing Up Sandstorm Gold's Latest Acquisition  [View article]
    Osisko Royalty did not mention the cash flow in their PR announcing the deal and Osisko Royalty likes to spend tens of millions on juniors years away from production that are about to expand their resource. See their recent $50 million deal. I spoke to Nolan Watson more about the Teck Resources royalty package deal after it was announced and about 80% of all the royalties acquired in the package are gold and silver. Yes, many are years away from production, but a few projects will be fast tracked with higher gold prices. Osisko Royalty management has said they will only operate in Quebec and Ontario. Sandstorm Gold takes more risk in other countries like the Karma stream which is one of only 4 new gold mines about to enter production in the next 6 months. Also, the bonanza grade drill hole results from Hot Maden continue to improve with 32 g/ton gold over 70 meters. https://t.co/07NlK8QC8C If you only want Canadian exposure don't buy Sandstorm Gold. Osisko is a Canada only company. I want more geopolitical diversification than everything in just 2 provinces in Canada and to find high grade low cost gold and silver mines, most of them are now being found in Africa or South America.
    Feb 11, 2016. 10:27 AM | 1 Like Like |Link to Comment
  • AuRico Metals Is Dirt Cheap  [View article]
    Their cash flow is from gold royalties. Young Davidson is the best royalty on a long life, low cost gold mine in Canada. Fosterville royalty is not considered great yet but will be upgraded. Aurico Metals management wants to release a new feasibility on Kemess project that was shuttered in 2013 and also continue drilling for gold and copper on the Kemess East portion of the deposit. The Kemess East has better grades of gold than the original Kemess underground copper/gold mine I believe. Aurico Metals has been spending cash on the balance sheet on drilling on Kemess and advancing a new feasibility study. This is no doubt worrisome to some investors as Kemess underground is a high capex primary copper mine. Many other astute investors I have talked to about Kemess underground mine call it a "mediocre at best copper mine." So some investors think Aurico Metals is wasting millions of dollars a year in spending $$ on drilling and permitting, etc for Kemess now in an environment where it's not a good idea to bring online a marginal copper mine.
    Feb 3, 2016. 05:43 PM | 1 Like Like |Link to Comment
  • AuRico Metals Is Dirt Cheap  [View article]
    I dunno for sure but here's an educated guess: Aurico Metals is currently going down 2 paths, 1) continuing to put money into Kemess 2) being a royalty company. The market may not like them spending cash flow from royalties on a high capex mine whose value is tied up in the copper price. The copper price is not doing well and should continue to stay in a low trading range or fall further until many more primary copper mines are shut down. In fact, copper mines are still getting investment capital and some large copper mines are opening. So, the market may be worried Aurico Metals is spending considerable money moving forward with a primary copper asset that is not economic in today's market.
    Feb 3, 2016. 04:15 PM | 1 Like Like |Link to Comment
  • AuRico Metals Is Dirt Cheap  [View article]
    I haven't looked at that yet for Aurico Metals, but the resource should be expanded along with mine life at Fosterville. So the Fosterville royalty is a much higher quality royalty now going forward. That makes Aurico Metals more attractive for a takeover target after the good drill hole results at Fosterville.
    Feb 3, 2016. 02:45 PM | Likes Like |Link to Comment
  • Resource Sector Digest: Snap, Crackle And Pop  [View article]
    Itinerant, I sent you some messages in your inbox here on SA.
    Feb 1, 2016. 02:25 PM | Likes Like |Link to Comment
  • Sizing Up Sandstorm Gold's Latest Acquisition  [View article]
    Royalty packages like the one Sandstorm Gold got from Teck Resources recently rarely go on sale for that price. Maybe once in a cycle or once every few cycles. Normally that package would have cost over $75 million for. CDE hasn't put their cash flow ($6-$8 million per year in EBITDA) royalty package on sale yet but it would most likely cost $65 million or more. Aurico Metals would most likely cost $60 million or more to buy.
    Jan 31, 2016. 04:11 PM | 1 Like Like |Link to Comment
  • Sizing Up Sandstorm Gold's Latest Acquisition  [View article]
    Osisko Gold Royalty got a lot less for its money from Teck Resources than Sandstorm Gold got in its royalty package from Teck. Sandstorm Gold made a much lower offer than Osisko did for that package. Osisko paid $28 million CAD for no immediate cash flow and many exploration stage royalties that could take more than 5-7 years before any cash flow. The 2.0% net smelter returns (“NSR”) royalty on the high-grade, advanced exploration-stage Hot Maden project located in Turkey, owned by Mariana Resources could earn Sandstorm Gold $4 million per year in revenues in only as few years as the project may be fast tracked to production.
    Jan 30, 2016. 01:06 PM | 1 Like Like |Link to Comment
  • Sizing Up Sandstorm Gold's Latest Acquisition  [View article]
    Sandstorm Gold's stock price is not far away from retracing back to the share price it was at before the Teck Resources royalty package was acquired. If everyone hated that deal so much, the stock would have stayed below $2/share in my opinion. At a higher gold price, this company can make a lot of money. At the current gold price they can focus on paying off debt with OCF and doing a few smaller deals per year. The cycle will have to turn in the next few years as larger gold miners need to replace production and reserves. Physical gold demand from China, India, Russia, etc is still strong...
    Jan 29, 2016. 04:58 PM | 1 Like Like |Link to Comment
  • Sizing Up Sandstorm Gold's Latest Acquisition  [View article]
    I said share buybacks a few years from now, not right now! ;-)
    Jan 29, 2016. 02:39 PM | Likes Like |Link to Comment
  • Top 3 Crisis-Proof Gold Stocks Right Now  [View article]
    Franco Nevada is by far the safest gold stock. They don't need debt to run their business and to grow and they are pretty well diversified. Unlike some gold miners, they don't have to bet their company on 1-2 mines.
    Jan 28, 2016. 06:39 PM | 1 Like Like |Link to Comment
  • Sizing Up Sandstorm Gold's Latest Acquisition  [View article]
    Investors should look at this latest deal in unison with the total combined portfolio now. The Karma deposit is nearing completion and should start gold production this March and that will be 20 assets online generating cash flow for Sandstorm Gold. Compared to the portfolio 2-3 years ago, this is a totally different company. There's been bad deals and growing pains but a few years from now, this will be a very mature company with a good sized portfolio of assets online with cash flow.
    Jan 28, 2016. 06:05 PM | 1 Like Like |Link to Comment
  • Sizing Up Sandstorm Gold's Latest Acquisition  [View article]
    Another royalty executive I spoke to about the Silver Wheaton case (not from Sandstorm Gold) told me Silver Wheaton can keep appealing this and probably not have to pay anything for a decade or more. If that.
    Jan 28, 2016. 05:58 PM | 1 Like Like |Link to Comment
  • Sizing Up Sandstorm Gold's Latest Acquisition  [View article]
    No one is talking about how Silver Wheaton followed all legal rules and now the revenue desperate Canadian government is looking to make up for lost tax revenues in the resource sector by going after one of the few remaining successful companies in Silver Wheaton. I guess when the government changes the rules ex post facto and moves the goal posts after the field goal has already been kicked in the air, no one blames the corrupt government.
    Jan 28, 2016. 05:57 PM | 3 Likes Like |Link to Comment
  • Sizing Up Sandstorm Gold's Latest Acquisition  [View article]
    You clearly don't want to hear this, but a share buyback program can be done in the future when metals prices are higher and the company has more cash flow.
    Jan 28, 2016. 05:54 PM | 2 Likes Like |Link to Comment
  • Sizing Up Sandstorm Gold's Latest Acquisition  [View article]
    How many gold and silver companies are growing cash flow in this environment? Please name some... Many miners have increased revenues on higher sales volume to counter lower metals prices.
    Jan 28, 2016. 05:51 PM | 2 Likes Like |Link to Comment
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