The big boys are talking.Pinetree is a huge corporation and has resources far beyond what any of us have. On their company site they have released a statement that they are now investing their money in Simba Energy Company. They wouldn't have done that without first evaluating everything about our company. Not just the property, but also the political ramifications. They expect to make an excellent return on their equity and to do that they invest in only the top of the top prospects. That means that they must feel that we have excellent prospects for oil on our property, that our management has the expertise needed to develop it and that politically, the local and national government will be co-operative. And don't forget that the price of oil is rising. With our property and prospects, and with the price of oil rising, our management should be able to raise the money to develop it or form a joint venture with a large oil company to develop it, and do it on terms beneficial to us. In the years to come we could end up with a stock price in the dollars range. Could even reach that this year.
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Pinetree Capital Ltd. was born out of the ingenuity of Sheldon Inwentash, its Founder and current Chairman and CEO. The Company started in 1992 and raised initial funds of $2 million for its first venture capital investment.
Using proceeds from successful early investments, Pinetree has continued to build its portfolio of early stage companies, typically taking a 20% to 40% interest in each company.
Anticipating that global growth would lead to an unprecedented demand for energy and resources, Pinetree switched its focus from technology and biotechnology to the resource sector in 2002.
Today, Pinetree’s strategy is to identify companies with good potential properties and reserves and invest heavily in advance of the projects being developed. Due to numerous global economic and political factors, Pinetree expects the prices of resource and energy-related commodities to remain elevated in the future.
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The Strategist January 30, 2011
We have a generally bullish view on commodities and oil in general as part of our “2 billion people entering the middle class in the next twenty years” thesis.
Not being geologists, it is rather difficult for us to pick winners in this space since their reports are not exactly written in laymen’s terms. We stumbled onto Pinetree Capital a couple of years ago as a vehicle that we then used to gain exposure to a broad swath of commodities (precious metals, uranium, rare earths, base metals, oil & gas). We like Pinetree Capital for its diversification effects because it allows us to give some of our capital set aside for junior mining companies to a manager who specializes in the space.
Traditionally classified as a financial company, we view Pinetree Capital as a junior mining investment fund instead. Pinetree invests in a broad portfolio of junior mining and oil companies from the seed phase onward with an investment portfolio worth C$468 million as of September 30, 2010. This shows that they know what they are doing because they originally started with a seed money of 2 million dollars.
With a finger on the pulse of the market and a proven track record of anticipating trends, Pinetree consistently invests ahead of the cycle. Evaluating the companies that they invest in may give you a heads up on deciding which companies you want to put your money in to.
Disclaimer: The facts in this newsletter are believed by the Strategist to be accurate, but the Strategist cannot guarantee that they are. Nothing in this newsletter should be taken as a solicitation to purchase or sell securities. These are Mr. Evensen’s opinions and he may be wrong.