RE: Stock tips anyone?4 mines going into production next year. Free ride $'s to TRGD (~$11,000,000 at the moment (and @ lower Au/Ag prices). New high grade base metal, open pittable props just added to the subsidiary. 6 JV's with 5 companies...they dilute, TRGD doesnt.
Drilling to begin on all props...43-101 Las Minitas 102,000,000 oz Ag, 120,000+ oz Au with potential for defining with a couple of step out drills the prior estimate of 440,000,000 oz Ag + X oz Au. All in Mexico.
Much more... DYODD.
Palladn
https://www.taragoldresources.com
https://www.resourceinvestor.com/pebble.asp?relid=24372
Unique Business Model Gives Undervalued Tara Gold Massive Upside
By Michael J. DesLauriers
02 Oct 2006 at 08:34 PM EDT
TORONTO (ResourceInvestor.com) -- Your correspondent rarely profiles U.S. listed resource stories, but exceptions must be made for undervalued high-quality names not listed north of the border. In this case the company is Tara Gold [OTC:TRGD], which closed today at 41 cents. Tara is a special story because of the company’s approach to creating shareholder value which involves spending other people’s money, and a focus on near-production assets to take advantage of high and rising metal prices.
Indeed, this model is one that RI is particularly fond of, and which for some odd reason is conspicuously absent from the charter of just about every other listed resource stock in the world.
The Model
TRGD has been severely under-followed and gone unrecognized by the market, essentially since its inception. This is partially because it is a multi-faceted story, with more facets (read properties) being added all of the time. Investors tend to have a very short attention span – they can understand a large single asset, and the fact that gold is going higher - beyond that it is often a struggle.
Because this story is not as straightforward as most, the best way for investors to grasp the whole picture is to examine Tara’s model in point form.
What you can’t see is worth more than what you can – The company is constantly leveraging its Mexican network of relationships to identify and negotiate on new assets, on which they can maintain a large minority interest for free.
Because they don’t spend their own money, dividends will be the result – Not only does Tara get paid in cash and shares in the companies to which it spins out the projects that it generates, as cash flow from these projects starts to come in, Tara will start getting monthly cheques, and there will only be one place for the money to go – to the shareholders.
No dilution, ever – Thanks to this innovative model, Tara never has to issue scrip, as they don’t need money for anything other than nominal general and administrative overhead.
Constant accretive growth – Because the company is always adding projects without dilution, Tara experiences what no other junior miner can claim – constant accretive growth.
Spin out – Tara plans to spin out its base metal properties so that investors will have a share in the stable of both precious metal assets, and base metal assets – each division will continue to grow.
Starting to tell the story in Europe – The company is beginning an awareness campaign in Europe which should help to get this story out to a wider audience, and allow for a market re-rating to a more realistic valuation. We have already seen some action in the stock over the last couple of weeks.
Graduate to AMEX – Tara is currently paving the way to a listing on AMEX, hopefully in the next 6 months. This will bring in a whole new class of investor and broaden the audience that can participate in the story.
Existing Assets
As is illustrated by Tara Gold’s latest Powerpoint presentation, the company currently has six projects of merit, including what many silver bugs would kill for – the Las Minitas project with 102 million ounces of silver.
More than this, Tara is cash flow positive, has a stake in 3 mines which will be developed and producing in early 2007, has partners spending $16 million on exploration, and whom are shouldering $18 million in acquisition costs. In addition to all of that, Tara owns equity positions in its operating partners equal to north of $4 million.
Tara is expected to cash flow just shy of $10 million in 2007, or more than 10 cents per share as three of its projects enter production. This figure does not factor in near production projects which are in the negotiating stage, and not yet under the company’s banner.
Conclusion
Raven Gold [OTCBB:RVGC] is a two project company. Both are J/Vs with Tara, one for 60% of the company’s La Currita, and one for 55% of TRGD’s Las Minitas. Despite this, Raven has a market capitalization double that of Tara, with all of its other projects!
This is one example of how undervalued Tara is just based on its existing assets, and at a market capitalization of just over $30 million (81 million shares outstanding) the company’s share price should continue to move higher.
Realistically, Tara should already be valued at a multiple of its current price given its current assets, near-term cash flows, and the pipeline of projects which will find their way into the company in the coming months.
With this no-lose, other people’s money business model and the company’s demonstrated ability to leverage its Mexican relationships into the consistent acquisition of exciting new projects on which it retains a healthy percentage share, this is a must have name for every investor’s junior mining portfolio.