I have a short position in Great Panther Silver because it seems like the company does not have strong cash flows.
Market cap: US$156M
Great Panther is listed on both the AMEX/NYSE MKT (symbol: GPL) and the TSX (symbol: GPR).
Cost to borrow: 3.625%
In general, I think that the underwriters are the sharks and investors are the fish. As I have written elsewhere on this blog, too much of the industry is focused on mining investors rather than mining ore.
Here is Pretium’s press release. Silver Standard seems to be in a strong financing position given that the company has around $671M in current assets (versus $333M in total liabilities), a producing mine, and a book value of $837M. Instead of investing this capital in producing assets, the company is selling a mining asset (part of its stake in Pretium) for cash. In my opinion, Silver Standard is not making a mistake.
*Disclosure: I am short Pretium common shares and will be holding onto my position. I don’t follow Silver Standard and have no interest in it.
Contango Ore is a company that should be releasing news but isn’t. The reason to own it is if you think that it has a promising deposit that has very good chances of turning into a mine. In that scenario, the logical next steps for CORE are:
The lack of news makes me very antsy. Something may not be right, e.g. the company has had difficulty selling the deposit or raising capital because the deposit is a dud.
Here’s my interpretation of Alderon’s June 30, 2014 press release (PDF) issued today. The key piece of material information is sandwiched between two slices of public relations spin:
Suppose that a junior and senior mining company have entered into a joint venture for a project. Suppose that the junior has access to feasibility studies prepared for the senior miner. NI 43-101 obligates the junior miner to file technical reports. Management at the junior should be disclosing material information to shareholders anyways so they should be issuing technical reports even without 43-101.
The easiest and cheapest way for the junior to meet its obligations under 43-101 is to re-purpose the technical reports prepared for the senior miner. However, many technical report authors hired by juniors choose to heavily modify the work given to them. The technical report prepared for the junior will change the underlying assumptions. In my opinion, the simplest and best explanation for this behaviour is that the junior is trying to inflate the technical report. They are likely pressuring the technical report author into manufacturing higher numbers.
This is one of the reasons why I dislike the junior mining world. Juniors are generally dishonest and extremely difficult to perform due diligence on.
Kobex Minerals is an illiquid $23.75M company that trades for less than cash. The shares currently trade at around $0.52/$0.54 while the company has around $0.74/share in cash. The company is currently buying back shares.
New management has taken control of the company. They are turning the company into an investment company. The CEO is Philip Du Toit (29 years old) and the Chairman is Paul van Eeden. I think highly of Paul van Eeden and think that this company is in reasonably good hands.
