Hard rock investments that are worth waiting for…and not.
(Ticker Trax subscribers received this report Monday March 8, 2010 before the close of North American markets.)
TORONTO -- We visit the mining world’s PDAC gathering each year at this time to review.
Ticker Trax scans the paper pile, and its notes and recorded conversations in some cases, from our year-ago march up the aisles. Cashew chew, too: the backroom sit-downs with middlemen and women who snack on nuts and relate to investors and reporters.
“Get on the bus before it’s too late,” one of ‘em blared at me this past weekend. I think it was yet another new-co in the area of miners’ metals. Yes, I believe in lithium. Surely, I see the promise of alluvial and other placer-mining schemes in Africa and South America. But I board no buses and I scaffold no one’s prospecting props. (Please viewour policies below.)
You see, the Prospectors & Developers Association of Canada conference hurts as many people as it helps. Waist lines, wallets, karma. Mint breath. Houdini acts that vanquish assets, cash, people. Oh yes, and occasionally, as Red Laker Rob McEwen or Osisko QuebecoisSean Roosen & Friends show us, PDAC raises rippled curtains on far greater wealth than any investor possibly could have dreamed.
So: Great Basin Gold (TSX: T.GBG, Stock Forum) – those macho Burnstone Mine predictions from CEO Ferdi Dippenaar over rib-eyes and potatoes? Yup, that South Africa mine mostly met its internal launch goals … and then some. I saw for myself. (Bonus points: a spiffy Internet Café for mine workers.)
Candente Resource Corp., now Candente Copper (TSX: T.DNT, Stock Forum) and fresh breakout Candente Gold (TSX: T.CDG, Stock Forum). Alas, our Ticker Trax™ jury is still out way-big time on Canariaco Norte’s copper-gold porphyry in Peru and its “development concepts,” stated a year ago, of 220 million pounds of copper per year with a 19-year mine life.
Ditto on jury-still-in-session for El Oro in south-central Mexico, centerpiece of the new Candente Gold. Petrographic work, we were told around this time in 2009, shows “excellent potential for additional gold-silver ore shoots beyond past (historic) production levels.” Show us please.
To CEO Joanne Freeze’s credit, the Candente team convinced U.S. Global’s Frank Holmes to head a pocket parade that cashed-up the new Candente Gold. First, Mr. Holmes, a longtime natural resources asset manager, had to tough-talk a Candente director or two about staking their own money to last year’s cash raise. “No more Mr. Nice Guy is what I say,” Frank Holmes says.
Canada’s Ms. Freeze, whose work we followed in The Calandra Report eight years ago, gets pisco-sour certs for cultivating Peruvian investors as loyal shareholders in the parent company. I think Peru natives, via a local listing, own a quarter of all Candente Copper shares, maybe more.
The weight of our wait? We are still hoping to report developments that will show us the promise of services provider Enterprise Oil Group (TSX:T.E, Stock Forum), whose Des O’Kell and other execs know their pipe but whose stock is a pipe dream I am glad to have avoided with a 10-foot totem pole.
Kimber Resources (TSX: T.KBR, Stock Forum) ; (AMEX: KBX, Stock Forum): its 50,000 hectares of gold-silver projects streak north-south on a pastel Mexico map yet remain a Sierra Madre mother-mountain of word-ware. Please prove me wrong and disappear the Houdini. (I own not a single Kimber share.)
Jury still way, way out: John Carlesso’s Mexico mess in Durango state: Oremex (TSX: V.ORM, Stock Forum). JC and his new, well worn CEO possess the integrity to clean up …. but there is, in that dusty patch of a vast silver resource in Durango state, a LOT to clean up in this ore-mess: bruised egos, uprooted trees, ignored villagers.
Dirty dozen cleaning up
Some 70 percent or more of the ballyhoo from executives, geologists, engineers and newsletter schnooks -- financial and geological – never transpired as it was described and transcribed. I know. I have the pile.
Are they going to do it this time? In the case of Candente Copper, one of 12 Ticker Trax Planetary Prospects, I Pelham 1,2,3 hope so. As with each of the Dirty Dozen, we here at home own Candente Copper (and after the share dividend, Candente Gold). Unlike each of the remaining 11 PPs, Candente Copper tests our planetary patience. After all, our 2009 and 2010 Peru, Mexico, Colombia and Montana stone-sifting brought us at least five copper hoppers (and one moly-maxi) that either ship the globe’s cathedral of cathode from filthy and existing mines … or are this close to trucking it to ports and smelters.
Those who brought home the metal a year after PDAC 2009: Bob Archer’s Great Panther Silver (TSX: T.GPR , Stock Forum) and Brad Cooke’s Endeavour Silver (TSX: T.EDR, Stock Forum) ; (AMEX: EXK, Stock Forum) each shipped more ore from their neighboring silver (and gold) mines in Guanajuato than the two rock-jocks said they would. Both are in our Ticker Trax Dirty Dozen.
I’ll get a refresher from Endeavour Silver on March 26 in San Francisco. The stock is expensive yet looks loaded to lock in further gains as Endeavour delivers high-grade ore from Guanajuato and develops its concessions in Durango state. Great Panther Silver stock is not expensive by any means. Some 70 percent of revenue for Great Panther derives from silver and another 23 percent from gold. I’ll eat that pie any day at the current stock price. (Once again – both are Planetary Prospects that we own at home, in keeping with the TT creed.)
Osisko’s Malarctic Gold Project – not a Planetary Prospect – cinched every one of its fiscal and milling chart points; I do not like semi-colons but figure the two Montreal wives at Osisko were 80 percent of le finesse. Dan McCoy’s Keegan Resources (TSX: T.KGN, Stock Forum) in the Esaase District of Ghana – not a Planetary Prospect -- tripped his light fantastic on each and every promise even in the wake of a nettlesome legal tangle. Bon mot!
Our policy spelled out:mot à mot
This past weekend, a longtime Stockhouseand Ticker Trax reader cornered me at a local pizza place called Waypoint, just a day or two after I indicated proposed Clearwire (NASDAQ: CLWR, Stock Forum) and (NASDAQ: CLWRR, Stock Forum) WiMAX antennae locations in our town of Tiburon-Belvedere, California. “Do companies pay you to mention them in your reporting?” That was the question.
No WAY. When companies, especially in the natural resources area, ask me, “Umm, so how do you get paid?” I respond: Subscribers pay for Ticker Trax. Stockhouse of Canada pays me a monthly fee, or commission, based in part of how many folks sign onto the wealth service. I also get paid for overseeing a small staff of editorial and technical folks at Stockhouse, which is one of North America’s repositories for commentary, data and news about metals and energy (and potash and oil services) companies.
Stockhouse makes its money in part from seeing companies place advertising on its service or blasting emails to its 750,000-odd viewers. Stockhouse is a electronic network in the world of investment relations. But I board no buses for any clients who advertise on Stockhouse. I promise no Quiche-Pro-Quail coverage of companies that sign Stockhouse contracts. There are scores of companies, and probably hundreds, that do business with Stockhouse that never get a good or bad word (mot) in my free Stockhouse coverage or in Ticker Trax.
Yes, if I see something worthy – usually on site – I report it, whether the mine or the mill or the land concession is advertising on Stockhouse or not advertising on Stockhouse. In addition, there is no guarantee that because I am fortunate enough to participate in a mine tour or come across fresh fiscal or other transaction goings-on that I will dedicate more coverage to the company or name it as a Prospect. Case in point: The photos in this report are from Antioquia Gold (TSX: V.AGD, Stock Forum) in Colombia. I do not own the shares but I did provide subscribers with revelations from my recent two, yes count-‘em, two tours of Antioquia’s Cisneros Project.
Do Stockhouse sales folks pitch companies that our Ticker Trax and Stockhouse research shows is worthy of coverage – positive and rock-crunching negative? I sure as Pelham 1,2,3 hope so. Do some of those mines and mills and concessions and prospects take the sales pitch? Yes, but not all sign on the digital line. When they do – as has Xtra Gold (OTO: XTGR, Stock Forum) of Ghana in a rare and preferred relationship with Stockhouse, one which includes cash and stock options for services such as media propagation of articles, networking and Web Page design – I promise you I am as thorough as all get-go in my reviews, on-site tours, shareholder contacts and fiscal analysis.
I have little notion of what the total “package” is in terms of sales contracts. Still, I hope this “preferred” company upon which we here are staking our Ticker Trax Planetary Prospect roster of years-long-buy-hold-buy-more strategy – I hope Xtra-Gold Resources, prospecting the Kibi Gold Belt, is paying through its teeth. (Smile.) If anything slides in the Xtra-Gold story, be it the loss of key personnel, deviation from drilling plans, severe or unwise dilution to existing shareholders, I hope to be among the first to report the blues.
We at home, meaning me, my wife and our two children, purchase shares of 
Planetary Prospects usually a week or longer after I have named the companies to the Dirty Dozen list. Often, that purchase occurs several weeks or longer after our initial reporting on a prospect or looming prospect. In one or two cases, namely BioCryst Pharmaceuticals, we at home bought the shares of the named Planetary Prospect at an average higher price than the access point for subscribers. In the case of this Alabama life sciences company, we owned the stock for well more than a year before naming the security as an official Planetary Prospect. That is usually not the way we run the list. (By the way, here at home, even amidst the run-up of drug discovery lab BioCryst to $13-plus a share in 2009 from the named price of $1.70 in late 2008, we continue to own each and every of our now-68,000 or so shares. No short-hedge or options strategies, period.)
Our Ticker Trax Planetary Prospect strategy is to purchase as cheaply as we can and hold for many years. In the case of our very first Planetary Prospect, Central Fund of Canada (AMEX: CEF, Stock Forum) and (TSX: T.CEF.A, Stock Forum), we consider the repository and closed-end fund for gold and silver as a kind of cash-proxy for paper. The highly liquid, $4 billion (I think) Central Fund is an alternative to owning currencies, money market securities, certificates of deposit and other paper-chase holdings around the world. As such, I think one can sell shares if needed for check-writing requirements such as paying the kids’ tuition and paying for the paint-job and new fence in the backyard. My longstanding song about Central Fund, going back to my beloved CBS MarketWatch coverage of the Ontario repository in 2000 or so, remains the same, Led Zeppelin-style: One new dawn, because closed-end funds trade at a premium (currently) or discount to the value of their physical holdings, every single investor in the town of Tiburon and in outlying towns, cities, states, provinces, departments and nations will want to own silver and gold (and platinum, copper, palladium, potash, molybdenum …) so much, the premium, or juice, will double in a day, or a week.
These seekers will want to purchase metal that morning because, for the first time in their lives, they will believe the price of gold and silver and copper will be far more costly on their next new dawn 24 hours later. And so few of them will know how to buy the coins, the bars, the silver rounds, the cathode sheets – so very, very few.
One or three more notes: I figure it takes about five or six contacts and well more than six months before a company, any company, gets my attention at Stockhouse or Ticker Trax. In the world of hard assets (Canada, USA, South Africa, Ghana, Colombia, Ghana, China, Australia, Mexico, Peru), I reckon there are more than 6,000 publicly held companies. Even more if you count stock exchanges in Russia, Europe, Hong Kong, Singapore, Japan.
Stockhouse pays most of my expenses. But we accept companies that offer airfare or hotel rooms for mine-hosted analyst tours. I fly coach regardless of business-class and first-class offers, and that includes recent trips to South Africa (14 hours from Atlanta) and Ghana (11 hours from NYC).
Ticker Trax by Thom Calandra is the right investment report for these uncertain times with its focus on identifying unique opportunities to help make you money.
and you won't miss out on any upcoming trading opportunities reserved exclusively for Ticker Trax subscribers.
Get your free copy of Ticker Trax Report Now
With one exception since November 2003, I decline offers to board the bus and place my money aside coverage when it comes to private placements or other stock and property sales that raise cash for private and public companies. My position in that regard is that our audience is not the $1 million-net-worth-qualified crowd that snags equity placements (units, warrants and so on). My placement stake in that soon-to-be-public Colombia gold-copper prospector is tiny and has been disclosed numerous times in Ticker Trax. I took the high-risk offering because of my belief that this prospect will become one of the most promising multi-concessions in Colombia, a place where I have dedicated much of our 2009 and early 2010 coverage.
What more can I say? I am sensitive to comments from folks who zing me. Those barbs stem from my January 2005 settlement/consent decree with the USA Securities & Exchange Commission. I have written at length on Stockhouse about it, discussed the settlement in media interviews and in Ticker Trax, and I talk about that span of my life in my workshops and other presentations. It was the best thing that ever happened to me in my professional life, and anyone who wants an apology for anything I did or did NOT do, they can have it, from my heart, my mind and my notebook.
Anyone who is a Ticker Trax subscriber, and I will go one further, anyone who is a Stockhouse free member can view my holdings online. I think I have every single one of the holdings current, but I try to check every week or two. Since Ticker Trax began publishing on Stockhouse in November 2008, I have done very little selling of securities, with the exception of dispatching Central Fund shares prices when necessary for cash. (I bought more Central Fund shares last week at about $13.90 USA per share.) We here at home still own a lot of Central Fund, along with recently minted gold and platinum coins and silver rounds. I sold some of our shares of a small Quebec-based mining services company last week – at a loss – and no, it was not Enterprise Oil Group, whose shares I never have owned. I do not trade options or use derivatives. (I find warrants to be compelling for their extreme leverage but have yet to purchase Clearwire shares or warrants.)
Finally, I always let subscribers know when I am adding to my stakes in Planetary Prospects, as is the case with Great Panther Silver. I also let subscribers know when my reporting takes me into an area of potential conflict. This is likely the case, for example, with my recent visit to silver and copper prospector Revett Minerals in Montana; I own about $600 worth of the stock and have since autumn 2009. Also of note: my Colombia reporting first brought me into contact with El Marmato on the border of Antioquia and Caldas departments several years ago. I now own, via my years-long misery of purchasing Colombia Gold Fields at the exact wrong time, its successor: Medoro Resources. Medoro, as I like to point out in Ticker Trax, is the only Colombia prospector at this time that is way too expensive for our audience given its capital requirements for cleaning up troubled El Marmato, relocating its village and purchasing the potent and pension-bankrupt Frontino Mine in Segovia, Antioquia. I am still losing money on the shares. That is all for now.
Ticker Trax™
Please see tickertrax.comto learn more about this wealth service and its 12 Planetary Prospects. Also, see its breakout feature examination of a Ghana prospector and get working research on several Colombia gold and copper prospectors. Subscribers, please click here for password-secure Ticker Trax.
HOLDINGS: Thom’s holdings are listed for all Stockhouse members at www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. It is public and free to view. He and his family own recently minted gold and silver coins and shares of a number of public and two private companies: Ivanhoe Nickel & Platinum and an Internet company called Mobyling. He is participating in a placement of equity in Sunward, the Georges Juilland gold and copper prospector in Colombia that looks to go public in early March 2010 week in Canada.
THOM CALANDRA of Ticker Traxhelps his audience find value in a quagmire of investment choices. Thom is the bozo who co-founded CBS MarketWatch andMarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold.
(All photos by Thom Calandra. Thom owns shares of each of the 12 Planetary Prospects in subscriber service Ticker Trax. Thom’s personal holdings are available for all to see on Stockhouse, the Canada publishing company.)
For Ticker Trax, please see Stockhouse Password-Secure Archives.
Ticker Trax™ is published by Stockhouse Publishing Ltd. Ticker Trax is an information service for subscribers and neither Stockhouse nor Thom Calandra is a broker or an investment advisor. None of the information contained therein constitutes a recommendation by Mr. Calandra or Stockhouse that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Ticker Trax does not purport to tell or suggest the investment securities subscribers or readers should buy or sell for themselves. Subscribers and readers of Ticker Trax should conduct their own research and due diligence and obtain professional advice before making any investment decisions. Ticker Trax will not be liable for any loss or damage caused by a reader’s reliance on information obtained in the reports. Subscribers and readers are solely responsible for their own investment decisions. Opinions expressed in Ticker Trax are based on sources believed to be reliable and are written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. All information contained in Ticker Trax should be independently verified. The editor and publisher are not responsible for errors or omissions or responsible for keeping information up to date or for correcting any past information. Ticker Trax does not receive compensation of any kind from any companies that may be mentioned in the report. Any opinions expressed are subject to change without notice. Owners, employees and writers may hold positions in the securities that are discussed in Ticker Trax. PLEASE DO NOT EMAIL THOM SEEKING PERSONALIZED INVESTMENT ADVICE, WHICH HE CANNOT PROVIDE. Copyright 2010 all rights reserved.