Dines and Mega (Pinetree)From the Forbes site: Gold Rush by Nathan Vardi
Sheldon Inwentash couldn't be happier where he is today-- promoting that other yellow metal, uranium, used to power nuclear plants (and make Iranian bombs). The price of yellowcake, a semirefined ore that is mostly uranium oxide, has quadrupled in three years to $42 a pound; there are now 320 uranium companies around the globe. "You look at the number of nuclear plants on the drawing board or in construction and there literally is not enough available uranium," says Inwentash, a 50-year- old Toronto accountant turned venture capitalist. His numbers don't quite add up. Uranium demand will certainly increase as new plants open in China and India over the next ten years. But, says Felix Killar, senior director at the Nuclear Energy Institute, the industry's lobbying group, "we are not going to have vast uranium shortages. There are people who are taking advantage of the situation."
Inwentash spent the 1990s not in the bowels of a uranium mill but pursuing riches in high tech and biotech via publicly traded venture funds through Pinetree Capital, which he founded in 1992. He did have a meltdown or two, including Visible Genetics, a company that made DNA-sequencing kits used to analyze genes linked to disease. Its shares briefly spiked to $110 on Nasdaq in 2000 before crashing. Bayer bought it for $61 million, $1.50 a share, in 2002.
Hoping to recover from the stock market crash, Inwentash turned Pinetree's attention in 2003 to gold and uranium. Since then he and his wife have amassed stakes recently worth a combined $100 million in various natural resources companies that trade on Toronto exchanges. Pinetree, whose stock is up 668% this year, is valued at $275 million. Inwentash and Pinetree, indirectly, also own stakes in Mega Uranium, which aspires to mine the stuff.
Yes, aspires. Mega has claims to some very rich fields but isn't doing any mining at the moment. Since January 2005 it has acquired the rights to Ben Lomond, a 10-million-pound uranium deposit, and to Maureen (6.5 million pounds), both in Queensland, Australia. Unfortunately for Inwentash and his backers, the Labor Party, which runs the state, has a long-standing ban on uranium mining. Ever the optimist, Inwentash insists that change is in the air. "It's not a law; it's a policy," he says. "There is going to be a meeting in April 2007, and the consensus is they are going to change that policy."
Investors don't seem to care at all. Mega's shares are up 330% in the last 12 months, and the company is currently valued at $300 million on revenue of $100,000 or so. Inwentash says interest in the stock has been driven by James Dines, a gold fan who runs the Dines Letter out of Belvedere, Calif. The two met and bonded, Inwentash says, at investor shows. Dines markets himself as the "original uranium bug" but is a bit press-shy. Approached at a May conference in New York, he refused to answer questions about his recommendations of Mega and Pinetree. "I am not interested," he muttered to a reporter before retreating to his booth, manned by five uranium-blonde models.
I don't know what you think of this but it has a certain smell. As you all know Inwentash is the CEO of Pinetree and Mega. Dines is recommending Pinetree stocks lately, at the moment 4 excluding Pinetree. Dines was selling Pinetree as an Uranium mutual fund although at that time they were only invested for 5% in Uranium. He pushed the stock from below NAV to almost twice that. It is obvious now why Pinetree and Mega are his favorites. I don't know why people keep on buying these stocks as they are way overvalued. Mega with a market cap of $250mln with only about 25mln (estimated by Inwentash) pounds of uranium in the ground. That's $10 per pound and the aren't even producing..... I find it strange that no other newsletter writer is recommending Mega. Guys have you ever thought of the moment that Dines flashes a sell for this company? Who wil be the buyers then?