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Sandstorm Metals & Energy Ltd STTYF



GREY:STTYF - Post by User

Comment by elmothefearlesson Oct 18, 2012 7:30pm
349 Views
Post# 20500778

RE: RE: RE: RE: Any thoughts on volume

RE: RE: RE: RE: Any thoughts on volume

Yes... dead on, and this is why I have 50% of my portfolio in SND, and I am going to keep holding... had a bunch of SSL cheap but sold for a quick pop, huge mistake (back when it was $3.00 or so, haha ;p).  Even if a miner generates free cash flow, that is going to go into maintaining the mine, exploration, or significant G+A overhead associated with running a mining company - essentially all cash burns that generate little to no return for shareholders.  Streamers have minimal overhead, meaning 90 cents on each dollar earned can be reinvested in a new stream.  Streamers can compound cash earned, whereas miners... have to buy another mine at a huge premium, usually leading to their stock being discounted!

 

The more I look at this NDX deal, the more I like it (as with all SND deals).  All the coking coal expansionary plans of BHP, Rio, Teck, etc., were put on hold with the tanking price of coal.  At $175 met coal, we are still making money hand over fist, enough money that our investment at $0.05 will double in a few months time, on assets with a 20-50 year life span (our reserves our 20 years, but if you read the NI 43-101, we have "resources" of almost 50 million tonnes - at 500,000 - 600,000 tpa production from the Rex seam, we are talking up to potentially a 100 year mine life).  If met coal hits $200 - we are laughing - I would assume this purchase will bring us up to at least 650,000 or 700,000 tpa production (including Rosa)... at $50 / tonne profit, we're looking at maybe $35 million a year cash flow, which would mean that our investment would be worth 350% what it is today.

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