Premier Exhibitions (PRXI) revisited

Currently, Premier Exhibitions is losing some money in its exhibition business and is in the process of trying to sell its Titanic assets.  Premier paid Guernsey’s to auction its Titanic assets but it looks like this auction has failed to meet Premier’s reserve price.  The failed auction suggests that the market price of the Titanic assets is not that high.  In the future, it may be more difficult for Premier to fetch a good price for its assets as the Titanic story is getting played out, it will no no longer be Titanic’s 100th anniversary, and excitement over James Cameron’s film re-release fades away.

Premier’s operating business is likely worth no more than $30M ($30M is likely far too generous).  Premier has a market cap of $117M.  The difference between the market cap and the value of the operating business can be attributed to the implied value of the Titanic assets.  Valuing Premier basically comes down to how much these assets are worth.

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Selwyn update… it is bad

Russell Cranswick, Resource Capital’s nominee to the board of directors, has resigned (press release).  In my opinion, it is highly likely that Resource Capital will liquidate its position.  The Selwyn project is likely uneconomic due to the increased cost of mining (this has gone up a lot in the past several years… look at the cash costs of gold producers for example) and the fall in lead and zinc prices.

*Disclosure:  Still long.  I probably should have just cut my losses earlier and sold… it’s just that I have an aversion to selling near the yearly lows and selling into a depressed market.  I will be trying to sell.

Noront update

Noront has updated its feasibility study.  “At current metal prices (August 31, 2012), the DCF indicates an after tax NPV(8%) of $233 million and an IRR of 18%.”  If you use the 3-year trailing average for metals prices, the NPV rises to $543M.  Noront’s current market cap is around $86M, so this stock could be undervalued.

Intel: a cheap-ish growth stock?

Briefly, Intel may be a good investment due to:

1. Cheap.  The P/E is around 10.3.
2. In the long run, Intel will be able to consistently grow its revenues as we find more uses for computers (e.g. smartphones, tablets, cloud).  8% revenue growth will likely continue into the near future.
3. Its economic moat.  Its dominant market position lets it enjoy economies of scale in R&D and in manufacturing.  On the fabrication side, Intel is almost always a step ahead when it comes to process size and process technology.

Canada Lithium: why I sold out

In short, I don’t know how to verify the economics of its project.

I used to assume that (pre-)feasibility studies can be trusted to some degree.  However, I looked into Consolidated Thompson’s technical reports on the Bloom Lake project and then I looked at Cliffs’ numbers– there is a huge discrepancy.  The technical reports show operating costs of around $30-31/ton (see page 135 of the PDF for operating costs) while Cliffs is currently reporting cash costs around $85-90/ton.  So now I feel like I really don’t know what I’m doing… it seems like you can’t take anything seriously when it comes to juniors.

Energold Drilling Corporation (CVE:EGD) revisited

Previously, I made a post about Energold where I said that there was some pretty fishy accounting going on.  Shame on me for making snap judgements.

Romarco Minerals (R.TO)

Romarco Minerals is a junior exploration company that is working towards moving its flagship Haile deposit into production.