RE:RE:We had now so many years......gratvalyou wrote: yeah, I'm still here but growing too weary to type anymore. I be the true bag holder! (20yrs) and not proud of it. Sold a few shares here and there, but after years of lawsuits ,and a rollback I still maintain my core position.Still love the story!
glta ,
Grat
Don't see why you wouldn't be proud of holding on to a story that is still good. You were one of my heros when I first starting posting here. I'm certainly not going anywhere either, and maybe it's time to talk about that a bit more.
I'm one of those investors who endlessly scours financial data looking for hidden assets that are not accurately reflected on the books.
Then I attempt to exploit those opportunities if the stocks are mispriced. If the hidden value becomes visible (usually through a business transaction of some type) the stock price gets corrected quickly. In the case of TUO, accounting principles as they relate to prospect generator companies can leave a huge value gap in financial reports. Essentially, the true value of investments in optioned properties doesn't show in Teuton's Balance Sheet. This is because the money given to TUO by the optionees reduces the value of claim assets on the books. It offsets the investments TUO has made, since TUO is "recovering" money on those claims. Naturally, the investments by optionees including option payments and exploration costs might show on the books of those other companies. However, if the optioned properties are eventually returned to TUO, those investments might not show up anywhere - they'd be written down by the optionees and not written back up by TUO - they just disappear. Over time, with many transactions, this has resulted in a substantial understatement of the value of TUO's claims.
On TUO's balance sheet, the largest asset by far (65% of total assets) is "Exploration and Evaluation Assets (E&E)." This number increases when Dino spends money on claims (drilling, assays, geological analysis, etc.) which makes sense since those are normal capitalized costs of developing claims that are available for option. But when the properties are optioned, the money taken in (like the $1.8 million from Pretium as an example) reduces the E&E number. In fact, the value of TUO's claims has actually gone down from the end of 2017 through September of 2018 because Dino has been successful at optioning his assets. If Dino were to sign an option for $4 million up front right now, his E&E number would actually go negative, even though the claims would obviously be worth a lot more due to that option.
After 20+ years of accounting for E&E assets according to the rules, the cumulative impact has been large. TUO shows only $3.1 million in total E&E assets on its books. This is insane given that just a few claims optioned to Pretium brought in $1.8 million by themselves and there are still some future payments due from Tudor. If you look back eight years or so, the total value of past options in terms of cash payments to TUO, market value of stock given to TUO, market value of subscription receipts, and exploration costs committed to by optionees, adds up to more than $25 million.
The stock price of TUO, at a current market cap of $6.1 million, reflects the assets that show on the books and ignores the hidden value of the claims (which includes future option payments due to TUO, all NSR's, any additional gold found at Goldstorm, the value of Treaty Creek as a tunnel route, planned exploration by optionees, and the solid value of some claims yet to be optioned (Del Norte is sort of highlighted right now, but there are several others I like such as Fiji, which sits right on the Homestake Ridge border). I can only imagine what would happen if Pretium began spending some of its cash on an exploration program targeting the claims it got from TUO and then found something.
Bottom line, for every dollar I spend on TUO stock I feel like I'm getting at least $4 worth of hidden assets (the difference between $6.1 million and $25 million). Time will tell if I will ever cash in on that assumption. But this is a pretty obvious (to me, anyway) accounting anomaly that should cause a repricing the stock. Timing of course is unknown, but there will be no time to build a position when the hidden assets become visible - it will be too late at that point. There are a couple of other prospect generator companies I'm investing in - same concept.
I have open orders on TUO at my average cost and below. The stock has come down a few cents in the past few days, so maybe I'll get some more cheap shares soon.
Always perform your own due diligence when investing. Best of luck to all. Doug