This Can Only Happen in the Mining Sector

Only in Mining

Goldgroup to Sell Caballo Blanco for $30 million

Goldgroup just announced that it entered into agreement with Temmins Gold to sell Caballo Blanco for up to $30 million. Because the transaction is in US Dollars, this equates to CAD 35 million. The reason why the conversion is important is because Goldgroup’s market cap of 26 million is in Canadian dollars.

This is probably a shock to a lot of people who thought that gold in the ground is worth nothing. Also, people kept saying over and over that Caballo Blanco is worth nothing without a permit. It is mind boggling that last year, Goldgroup’s market cap was $4 million.

Here is the press release.

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December 2014 Issue of Ultimate Value Finder is Released


Investment Opportunity 1 – I Cannot Believe It Again

Someone asked me how I find investment opportunities. I said that I write a newsletter which includes three ideas per month, and I check back on the ideas that I wrote about in the past to find out if investors did something stupid which could allow me to buy these companies at undervalued prices. In the case of Company 1, investors definitely did something stupid. I first wrote about Company 1 in March 2013.

At that time, the stock price was approximately $4 per share and I titled the report, “Company 1 – I Cannot Believe This Opportunity is Still Available.” Literally within months, the stock price shot up to $12 per share making me look like the best newsletter writer on the planet. Before I was able to accept my award for excellence, Mr. Market said, “Not so quickly, dummy.” Bam, the market trashed the stock price from $12 per share to $3.50 per share within days.

Investment Opportunity 2 – Angry Investors Are Pointing Fingers

Most money managers are underperforming the general market indices which are constantly soaring higher since 2009. The reason why they are underperforming is because they hold different stocks than what comprises the Dow or S&P 500.

If they hold stocks like Company 2, their underperformance is even worse because while over the last three years the markets have been significantly up, this stock has been significantly down (66 percent).

The stock’s underperformance was mainly caused by the cyclicality of its business segments and improper integration of acquisitions. To deal with the underperformance, the CEO announced his cost-cutting initiative to rightsize the company’s cost structure to the existing revenue base. If he succeeds, the stock price has a chance to double from the current levels.

Investment Opportunity 3 – Change Needed to Unlock Value

If you are the owner of a company, employees work for you. With public companies, the managers can easily forget that they too work for the owners. Consequently, they can abuse shareholders by taking sizeable salaries without generating returns for the people that they are supposed to work for. Well, after some time, owners can rebel.

This is the case with Company 3. A large shareholder who controls 11 percent of the shares has had enough of the company’s dismal financial performance. According to him, unless something changes, the underlying value will never be unlocked.

If you are a subscriber, you already received an email with the full December issue. If you are not a subscriber but wish to subscribe, click here.

Is the Conventional Market Overvalued?

Over the last five years, I wrote two books, Why Are We So Clueless about the Stock Market and The Basics of Understanding Financial Statements. The first book, I wrote in 2009 and the second one in 2012. I sell them in two formats: paperback and Kindle. All the transactions take place on Amazon. Because Amazon has different websites for different countries, I get automatic deposits from different countries, but the main ones are US and UK.

bookcover11 bookcover22

I am shocked by the amount of money that I am making from the sale of these books. I am selling 10 times as many books as I was selling just a couple of years ago. I kid you not. It is an increase of 1,000 percent. While I am definitely happy to be making more money, you have to ask yourself a question – why am I selling so much more?

Am I marketing more? No, I spend $0 on marketing.

Am I blogging more to get more traffic to my website? Not really.

Am I cold calling? No.

I am doing absolutely nothing yet my books are selling like crazy.

The only explanation that I have is that the stock market is going up and people want to make easy money so they look for investing books to educate themselves about the stock market. They go to Amazon and my books are recommended and they buy them. The funny thing is that nothing is cheap. In 2009, when I wrote the first book, it was a good time to educate yourself but not now. Right now you should be reading books about gold mining industry, not how to value overvalued companies.

Aurcana – I Am Annoyed with My Broker

When I wrote the post, Cha-Cha for Goldgroup, I said that I was depositing some money with my broker to buy more Goldgroup. However, during this time Aurcana got crushed to $0.20 per share which was absolutely ridiculous. So instead of buying Goldgroup, I was going to buy Aurcana. But it took my broker 20 days to clear my money. Now Aurcana just traded at $0.425 which means I missed a double. I am so annoyed. So I bought more Goldgroup yesterday which brings my holding to approximately 830k shares. FYI. Look at Goldgroup’s volume on the Canadian exchange. Yesterday, it traded 1.4 million shares and today just 30 minutes into trading, it already traded 500k shares. Someone is acquiring shares like crazy.

Annoyed with my broker

Tiny Oroco is Definitely Wanted

Well, that was quick. Just a couple of weeks, I wrote about Oroco for the November Issue of Ultimate Value Finder and the market cap doubled. It now stands at $4.2 million from $2 million. It really looks like investors decided to assign the company a new price, $0.055. Congrats to you if you were able to buy it at $0.03. I have to say that it kind of surprised me how quickly the stock moved because people are simply not interested in the miners no matter what.

new price

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Veris Gold Achieves Monthly Record Production

As you know, I don’t own Veris Gold anymore but I keep track of it. The company just achieved monthly record gold production. Not that any of this matters to the market, but it matters to me because this continues to show that the operational turnaround ,which is something that the management can control, is moving forward. Unfortunately, at the current price of gold, Veris has very little chance of generating cash flows.

Veris Gold Corp. Achieves Monthly Record Ounce Production at Jerritt Canyon in October 2014

Vancouver, BC – November 7, 2014 – Veris Gold Corp. (“Veris” or the “Company”) is pleased to announce that a record 18,081 ounces of gold were produced for the month of October at its wholly-owned Jerritt Canyon gold mines and processing facility in Elko County, Nevada.  Jerritt Canyon is operated by Veris Gold USA Inc., (“Veris USA”), a wholly-owned subsidiary of the Company.

During the month of October the processing plant at Jerritt Canyon averaged 4,015 tons per day of Jerritt Canyon ore with an average recovery rate of 86%. The improvement in the grade processed, from 0.15 ounces per ton (“opt”) in September to 0.17 opt in October, contributed significantly to the record monthly production achievement. These results highlight the continued growth and improvements happening at the property.

Francois Marland, CEO commented, “The operations continue to improve with every passing day thanks to the dedication and perseverance of our team at Jerritt Canyon headed up by Graham Dickson, COO.”

Graham Dickson, COO commented, “The continually improving performance of the milling facility is due to the hard work and dedication shown by the Milling Group headed up by the Mill Manager Chris Jones. We would like to recognize Chris Jones, and his team for a job well done in achieving the highest ever monthly Veris gold production. They have been aided in this by Small Mine Development (“SMD”) our mining contractors and by our own internal mining group.”

Saval 4 Mine Opening
On October 23, 2014 the Company celebrated the official opening of the Saval 4 Gold Mine. Late in the second quarter of 2014 the Company re-commenced development of Saval 4, the fourth operating underground mine at Jerritt Canyon, with pre-production occurring in July. The Company plans to mine the Saval 4 using existing equipment and crews at a scheduled mining rate between 250 and 300 tons per day grading approximately 0.2 opt.

Toll Milling
Anova Metals plans to deliver its first batches of Big Spring’s ore to the property in June 2015. Key terms of the toll milling agreement provide for the delivery of up to 1,000 tons per day of ore, which will be processed in 25,000 ton lots. The Jerritt Canyon processing facility is located approximately 26 miles south from the Big Springs project. This will further reduce overall cash costs at Jerritt Canyon resulting in a more profitable operation.

Third Quarter results will be issued end of day on November 14, 2014.

Quality Control
Assaying of all mine production samples are conducted by the Jerritt Canyon lab using standard fire assay techniques. The company’s Quality Assurance and Quality Control protocols are documented in the most recent NI 43-101 Technical Report available on Sedar or at the Company’s website.