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brucegmurdoch

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  • IAMGOLD: The Sadiola Acquisition And Economic Uncertainty Will Help It Sustain The Recent Momentum [View article]
    Harsh, if you like Sadiola, you're going to love what's coming down the pipe at Boto. We're talking about more ounces in the ground, more ounces production.......and a cash cost as low as $418 (yes you heard it right). $418 is the cash cost for B2Gold's Fekola (contiguous property to Boto) for the first 7 years of production (see B2Gold NR June 12/15). Boto and Diakha are effectively twin deposits with Fekola so, $418/oz cash cost of production is almost a certainty. Just that cost factor alone will make Boto/Diakha/Karita and Siribaya become by the far the most profitable mine in the portfolio......and far more valuable than Sadiola (which is why they are looking for a Sadiola partner).

    This development will push IAG into senior producer status.

    To understand what's going on around Boto, you have to get familiar with Merrex Gold, the JV partner for Siribaya and Diakha as they are doing all the reporting on the deposits contiguous with Boto. This whole complex around Boto will turn out to be an easy 15 million oz, probably up to 20 million oz. as there are so many tested and/or sampled targets.

    Once this becomes better understood, it wouldn't surprise me to see someone take a run at taking out IAG by end of year for $4-$5.
    Jun 13, 2015. 05:03 PM | 5 Likes Like |Link to Comment
  • Conn's - Strength Today Is An Opportunity To Sell And Possibly Short [View article]
    This is a great trader's stock. Lots of volatility, partly due to a small float,partly due to volatile management practices.....you never know what they are going to do next.

    Also, the volatility tacks on big premiums to the options so call sellers can make high returns by selling in the money calls, limiting downside risk a bit.

    Where it is headed is anyone's guess. There is upside if management can get their act together on both the retail side and the credit side so that the future looks more stable and profitable. Otherwise, any management blunder such as a bad portfolio sale will send it back down to the $20's.
    Jun 3, 2015. 10:56 AM | 1 Like Like |Link to Comment
  • Update: Iamgold Reports Drilling Results From Its Boto Project In Senegal [View article]
    Good analogy arihalli. Tracking down the full Boto story is a bit like a treasure hunt.

    The market is attributing about $0 market cap to IAG for Boto right now. While it is difficult to assess what this is going to do to IAG's market cap when the market sees this multipronged development come together, one comparable is B2Gold's Fekola 17kms to the north which B2 bought from Papillon......5 million oz in the ground for $600 million. Give or take, IAG's development should emerge in the same magnitude......3 million oz at Boto and 2 million oz at Diakha as well as the JV's nearly 1 million oz at Siribaya. Karita could be as high as 3 million oz. So, even if we value it equal with Fekola, that is $600 million on top of a current market cap of $800 million......or something over $1.50/share.

    As I mentioned in my previous posts, I doubt that the big picture here will begin to emerge until IAG buys out the balance of the JV with Merrex and includes it in the Feasibility Study for Boto. Then it will become clear that this is a pretty big deal for IAG. Of course it is a much bigger deal relatively speaking for Merrex. As a Merrex shareholder, I'm looking for the current .15-17 price to become .40-.50 by then end of 2015. You're welcome to buy a few shares if you have some spare mad money! MXI on TSX.V
    May 27, 2015. 06:20 PM | Likes Like |Link to Comment
  • Update: Iamgold Reports Drilling Results From Its Boto Project In Senegal [View article]
    Sorry arihalli, I didn't see your reply and questions. Better late than never? All the factual information in my post is publicly available. The opinions of course are mine.

    My question is why investors, even analysts haven't looked at this more closely. I suppose you get what you pay for. Putting Boto and Diakha together isn't so straightforward from an analyst's point of view. IAG practically under-reports on Boto (100% owned by them) but don't report Diakha (50%) at all, and leave it up to JV partner Merrex to report on it so you need to go there to put it all together. Given the fact that Boto is in Senegal while Diakha is in Mali, that makes it even more obscure. Yet Boto and Diakha are almost a stone's throw from each other. Diakha, according to company officials, appears to be a "twin deposit" of Boto. In fact it is likely just an extension of the same deposit.

    The market hasn't rewarded IAG for this yet because it hasn't put together all the pieces, and IAG has changed its drilling strategy at Boto where they are no longer drilling for ounces, but they are drilling to move the ounces into reserves from resources in preparation for the Prefeas to begin in July and the Feas to be completed early 2016. As far as the public's perception goes, Boto is just a 2 million oz deposit that will support a nice little mine and it is not yet apparent that this is a much bigger deal than that.

    Adding to the Boto/Diakha excitement is that fact that in May, Merrex has started sampling Karita.....even closer to Boto than Diakha. The strip of land they have is loaded with artisanal workings, providing evidence that it is also a continuation of Boto. While this is 100% owned by Merrex, you can be sure that IAG will buy it when it gets proven up.

    Boto/Diakha/Karita has the potential to become IAG's biggest producer.....and at a much lower cost than the company's current average.

    Anyway, I think it is easy to see why the public hasn't put this altogether yet because the information sources are so fractured. I happen to be a Merrex shareholder so I keep a very close watch on Boto-related events and IAG is terrible at reporting details, but Merrex, being small, is much more detailed. So on the surface, this doesn't look like a major development going on. However, if and when IAG releases details of their Scoping Study, that might bring analysts on to pay attention. The other event that may cause analysts to look closer is when IAG buys Diakha from Merrex, which, if the drilling continues to be good, should occur later this year. Then it may be more apparent that IAG has something big here.

    I also watch closely the B2Gold developments at Fekola just a few kms north on the same trend. B2 is already doing ground prep for the mine. The other interesting thing is that they are re-doing Papillon's Feas Study and will have the new Feas in June. This will be interesting because it will tell us almost exactly what a Boto mine is going to look like and cost.
    May 24, 2015. 10:10 AM | 1 Like Like |Link to Comment
  • IAMGOLD's Recent Rally Will Not Last Long [View article]
    It's a strange article in that it is primarily a speculative article on the price of gold. I suppose it is related to IAG in that the IAG share price is leveraged on the price of gold.

    The past has shown that it's a fool's errand to embark on gold price prediction. The only way you will be right is to keep saying the same thing long enough and sooner or later, you will be right......temporarily.

    From a fundamental perspective, IAG needs to be analyzed from the perspective of production cost and the prospect for increased production and reserves. There's not a lot of great news on any of it. They seem to be devoted to cost improvements but nothing is particularly attractive at the moment, and Westwood is questionable for at least a few months. The potential of Sadiola and Boto are both interesting but they are moving at a snail's pace on both of them. If investors are going to get excited about this company, it really needs to pick up the pace on cost reductions and development projects. They need to demonstrate they are good miners, something that the market is not convinced of.
    May 19, 2015. 02:46 PM | 4 Likes Like |Link to Comment
  • Iamgold: My Concerns About Westwood Were Valid [View article]
    IAG should keep on monetizing all assets after tuning them up if they want to serve their shareholders properly. Then they could start fresh with Sadiola and Boto and with billions they can return to shareholders.

    I doubt anyone would take Westwood at the moment. Risks are too high so IAG is stuck with fixing it or giving it away.
    May 12, 2015. 06:33 PM | Likes Like |Link to Comment
  • Iamgold Is Cheap Compared To Gold Peers [View article]
    Because the cash was plunked down in front of them and they couldn't say no. It doesn't sound too sophisticated but it happens a lot, particularly in a capital environment that is difficult to raise funds......they start to think another opportunity might not come along anytime soon again.
    May 12, 2015. 12:17 PM | Likes Like |Link to Comment
  • Iamgold Is Cheap Compared To Gold Peers [View article]
    Good article. First article I have seen that comprehensively outlines the new strategic direction of the company: to leverage existing assets such as Sadiola and Boto rather than overpay for current companies. It's a good move, particularly considering their purchasing track record.

    Boto could yield some surprises. I have to wonder if they aren't in talks with B2Gold over sharing processing facilities with B2's upcoming Fekola plant just a few km's away. Surely this idea has arisen which would substantially reduce capex and AISC for both of them. In fact it seems a bit nutty that two brand new processing facilities would get built simultaneously just 5-10km apart. Also look for IAG to buy out the Siribaya permits from Merrex Gold in the next few months so that they can include 100% of Diakha into their Pre-Feas for Boto.
    May 12, 2015. 09:04 AM | 2 Likes Like |Link to Comment
  • Iamgold: My Concerns About Westwood Were Valid [View article]
    This is what happens when you have non-miners running mining companies. Conway was CEO when they decided on Westwood and Letwin has been the CEO in charge of executing it. When the top guy can't contribute to the operational decision making process, he has to rely on lower level staff to recommend key decisions. That's why companies like Randgold are so successful as the top paid guy Bristow is also the smartest mining guy as well as a smart business strategist. When you have a Certified General Accountant at the top, operational risk skyrockets.

    I've seen the same problem on the exploration side. IAG piddled away $30 million on Siribaya, found almost 1 million oz but never did understand the structure. On the upside, the newish VP of exploration McDougall seems like a quality guy and can be credited for what will be the biggest success story of the company: Boto and Diakha. He seems to be competently in control there.
    May 9, 2015. 05:32 PM | 3 Likes Like |Link to Comment
  • Iamgold: First Quarter Cash Costs Come In A Little High, But I'm Still Buying [View article]
    I would add to your good comments that because IAG is a high cost producer, their share price is highly leveraged to the price of gold. So should the price of gold make a decent move up, IAG will become one of the best performing stocks out there. In the meantime, they have sufficient cash to get them through a further downturn in POG. Letwin says he will maintain at least $400 million in cash and bullion after they make their investments.

    Another thing to add is that Boto, Sadiola and Cote Lake are getting assigned about $0 market cap. Cote Lake is understandable as it won't be profitable without a significant increase in gold price but Boto and Sadiola both have economic metrics that has management pretty excited these days. They feel they already have the in-house assets to push them beyond 1 million oz/year.
    May 7, 2015. 04:13 PM | 1 Like Like |Link to Comment
  • Iamgold: First Quarter Cash Costs Come In A Little High, But I'm Still Buying [View article]
    Right on Russ. And I think you are going to get your wish with Boto. They have completed the scoping study, then they are moving to a PreFeas after the rainy season commences in July and expect to have the full Feas completed in spring 2016. So we can expect to see construction begin next year imo.

    Furthermore, the results at the adjacent Diakha deposit continue to look very good. Expect them to fast track the scoping study there before the maiden 43-101 so that they will be ready to roll Diakha into the Feasibility Study. The Diakha discovery is being termed a "twin" deposit to Boto Malikounda so they will no doubt be able to come up with stellar economics by adding Diakha into the Feas for Boto.

    If you have a bit of pocket change, throw a few bucks into the JV partner with Diakha........Merrex Gold (MXI on Toronto Venture) because they will surely be buying out the other 50% of Diakha well before the Feas is completed.......I'm thinking right after the Scoping Study and before the Feas is started. MXI is trading at .15-.19 lately and should fetch .40-.50 later this year depending on drilling results.
    May 7, 2015. 03:52 PM | 1 Like Like |Link to Comment
  • Iamgold: First Quarter Cash Costs Come In A Little High, But I'm Still Buying [View article]
    I understand that the money offer basically fell into their laps so they took it. They hadn't gone looking for it. This is pretty typical in the industry, particularly when capital is not flowing fast and easy. These guys take it when they can get it because they don't know when their next chance will be.

    I know it doesn't sound very brilliant or professional, but that is often how it works and a quote from Letwin backs it up in this case that it was simply available and they took it. (Please don't ask me to dig up the quote but I did read it......honest! )
    May 7, 2015. 03:42 PM | Likes Like |Link to Comment
  • Iamgold: First Quarter Cash Costs Come In A Little High, But I'm Still Buying [View article]
    According to the Q1 CC transcript, they have changed their strategy from finding an operation to buy out and are now focusing on investments in existing brownfield and greenfield operations. It's actually a good move because they really need to get good with their existing assets before taking on something new. Leveraging existing assets often makes a lot more sense than taking on the new and unknown.

    Look for continued big improvements in all existing operations, a move ahead on Sadiola, and fast tracking of Boto/Diakha Pre-Feas (with a mine announcement within 10 months when the Feas is completed).

    They are also dropping their priority on spreading out political risk and are going to focus on bottom line first, so a greater, not lower, concentration in Africa is where they are going.
    May 7, 2015. 08:50 AM | 2 Likes Like |Link to Comment
  • AmEx beats, but outlook still dour [View news story]
    Exactly my thoughts. The market is interpreting it as Costco getting rid of Amex, but it is likely the other way around. In the end, it's not revenue that counts, it is profit.

    Regardless, Amex has work cut out for them, at least for guys like me. I have my successor Amex card from Costco Canada. I have a nice big limit, get some cash rebate off it......but a lot of places don't take it so I generally don't even check anymore, just use Visa.

    Regardless, I'm going to sell in the money puts tomorrow because all the bad news is likely baked in so things are looking more up than down. If I have to buy the stock from that, it's still a good deal.
    Apr 16, 2015. 10:00 PM | Likes Like |Link to Comment
  • What Will Iamgold Do With Its War Chest Of Cash? [View article]
    Not much value in Cote Lake. One more of those and the company is finished.
    Apr 4, 2015. 08:38 AM | Likes Like |Link to Comment
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