An Old Tout Comments on TGZ and NSUI violated Grandich's wishes expressed below because I think it's a worthy read all shareholders should see. If he cuts me off from his private emails, so be it!
I remind you I do this strictly as one friend to another and you’re among a handful receiving this so please don’t forward to others because it will find its way onto the Internet and one of the best things leaving the metals and mining industry behind for almost three years now, is I don’t have to deal with the Inter-nuts that live on those whacko chat sites.
I still own almost all my NSU and TGZ shares I started the year with. In addition, family members have purchased new positions.
Because you’re a true blue friend and greatly supported me through the years, I will give you my bottomline assessment of both companies, keeping in mind I have no formal business relationships with either company (but I still converse with key management personnel on occasion).
NSU – Despite copper and especially zinc prices improving nicely, NSU share price is not performing well. I suspect the two main reasons for this was much of the shares issued in the takeover have come back into the market thanks to greater liquidity. The setback in getting to commercial zinc production and some metallurgy issues at a time when the share price was already being leaned on by those shares hitting us in the face, has set up a perception of troubles far greater than the reality. That’s at least what I gleamed from the most recent conference call, as the company is hamstrung on what it can say (but did suggest things were improving as each month passed on that issue).
One of you wrote and asked is NSU another SGC? Perish the thought-lol. In all seriousness, the management at SGC couldn’t even carry the bags of the management at NSU despite they both operate (or operated) in Eritrea. Cliff Davis is everything the gang that couldn’t shoot straight at SGC wasn’t – THANK GOD! But please, those dark days are behind us and it no longer matters (much) that those clowns were perceived at the end to have somehow rewarded shareholders when they milked SGC for years and left crumbs for those of us who gave them our heart, soul and pocketbook for years. Don’t offend anyone at NSU, even the janitor, in comparing SGC in any manner to NSU.
While Bisha will likely never get remotely fairly priced thanks to its location, it is a cash cow never-the-less and has led NSU to capturing what many (including yours truly) believe could end up the biggest base metals mine in decades. I can sense the frustration in NSU management in that conference call in the inability to discuss in great detail their new baby until there’s a formal, regulatory required report completed next year. But give them credit for acquiring it and know I believe something like $60 million in exploration is to be done in next year or so.
Bite your tongue and if possible (I know it’s not but try-lol), don’t look at NSU until the New Year. I suspect dividend is safe for at least 2 more quarters and while it may be cut or reduced to a stock (versus cash) dividend to use cash to pay for development, the play here is 2017 on.
TGZ – I reprimanded a certain party for posting on a chat site, the links I forwarded of three research reports on TGZ earlier this week. Again, I plead with you to make this for your eyes only.
Today’s announcement of a financing can best be described as short-term pain in exchange for potential big-time long term gain. Like NSU, I suspect its best to not watch share price until New Year (although a sharp rise in gold price could get us back to 52 week high sooner than later).
Many (including yours truly) have adopted an “I’m from Missouri” attitude towards TGZ management and have wanted them to prove themselves again before thinking some short comings of theirs were truly behind us. We were almost there and then another production issue has put us firmly back in Missouri mode.
But let’s not lose sight of what’s being built long-term and we now have a major shareholder who owns about 17%, with huge deep pockets and is clearly looking at this as a major company within their empire in that area of the world.
Once this “done-deal” financing closes (if not sooner), I would look for the share price to head back towards its 52 week high. Tell me gold is north of $1,400 and I be shocked if share price wasn’t north of $2. Unless gold sells off sharply, this latest financing share price is the likely downside level so I see no reason to be a seller.
Okay, the old Grandich Publications hat is going back to the museum.
God bless,
Peter