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North American Gem Inc V.NAG



TSXV:NAG - Post by User

Comment by Durkastanon Jul 29, 2010 8:34am
492 Views
Post# 17306140

RE: I'm baffled.

RE: I'm baffled.I don't understand how a stock that is still in the exploration stage can take off 100% and greater on spec. Nag has minable deposits, Thus cashflow as opposed to going for a PP to keep exploring. So I am baffled:

Day trading is a wonderful thing. Short term speculation is the single most powerful force in the penny market.
NAG has mineable deposits, sure. But are they generating enough cash flow from their current operations (mine #2) to fund their future mines? Not by a long shot. If you think there aren't going to be any more PP's, you are mistaken. Count on it.

1) Jay Taylor had a $1.50 target by year end or there abouts

Jay Taylor gets a lot of things wrong, as do many analysts. Trade on their recommendations at your own risk.

2) Nag has several other properties that are proven , and minable

Proven and mineable should count for something, sure. They're worth something - at least what NAG paid for them. They aren't generating any cash flow, though. This comes back to the market discounting mechanism. How many of those mines do you think that NAG will get up and running, how long will it take to do so, and how profitable will they be? The more mines, the sooner they are done, and the more profitable = the higher the SP should be. Clearly the market doesn't share your enthusiasm for these properties, or the SP would be higher. Or maybe you've spotted a great undervalued stock. Such things are up to the individual investor to decide.

3) I don`t think any company would mine anything that isn`t profitable...... the loss would have to eventually be public knowledge

Careful. There is a difference between the variable costs and fixed costs of a company. Just because they are selling the coal for a higher price than it costs to mine it doesn't mean that the company is profitable. There are salaries, rents, etc. to pay for. Is 8,000 - 10,000 tons/month generating enough profit to pay for all of the company's costs? I don't know the answer, but I'd guess probably not.

4) We haven`t seen the profit yet from mine / 1

Financials to be released soon. I expect to see an overall loss.

5) Mine 2 , 3 ,4 and so on will get permitted ( might not be within NAGs`original time frame but IT WILL GET DONE, they havè delivered what they said)

See #2 for my explanation of how those mines add to overall company value.

6) They have buyers in place.

They had buyers in place for mine #1, too. A lot of people have mentioned this "fact", but to be honest the only thing that it demonstrates is that whoever is working the sales desk at NAG is doing the job they are supposed to do. Hooray, their team isn't COMPLETELY inept.

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