TODAY: AMERICAN SANDS ENERGY, BITTERROOT RESOURCES, SANDSPRING RESOURCES, SYSOREX GLOBAL, et al
Natural resource securities and other commodity stakes continue to rebound, making illiquid and parched investments in our hands: 1. easier to trade than when we bought 'em; 2. worthy of parables.
Speculative buying finally is benefiting select miners and mineral explorers. Also: lightly exchanged securities that represent fresh faces in computer services and biomedical applications.
Our TCR family bears the load of parables dedicated to forlorn securities these past 36 months. Some of the narratives started, we all know now, at the summit of parabola (
March 2011), only to cascade the following three years.
Failing grades for technical and secular market analysis go to TCR (and to me) for sticking with them. With a handful of exceptions, we did, in this report and at home (family portfolios): to the tune of 70 percent capital-
say-bye-bye.
That harsh a decline, spanning three years, was delivered to about half of our individual prospectors, miners and even bio-medicals. (Not all were small-companies; Ivanhoe Mines has been a stock-market capital-letting that befits author Joseph Conrad's grotesque Congo parable.)
Did you know (?) -- I did not -- there are two sides of a parabola's arc: what goes up (
our current condition) and what goes down. Yet the word
parabolic has as its first definition in some tomes, including
Merriam-Webster, "expressed as a parable."
Our TCR 8 featured investments**, and our
far-reach speculations, are nearly all
in the money, and a few are parabola-soccer-ball-
rising.
The steepest section of the curve goes to Sysorex Global Holdings, American Sands Energy, Sandspring Resources, True North Gems, Atico Mining, Nex-Gen Energy, Pilot Gold, BioCryst, Inovio Pharma, Elgin Mining, Cayden and Lakeland Resources -- to name a dozen that are bouncy in our TCR coverage.
(Some of those private reports are made public via
Stockhouse.com and
CEO.ca, for those who want their narratives in the free, time-warped and actionable-edited versions.)
This capital replenishing comes even against commodities' "black bank of clouds," to borrow a description from the author Conrad's Congo diary.
Warning signs this month include copper's getting all shook up on China's wall. Helping us: this fabulous rally in gold; tremendous speculative appetite for uranium equities, silver producers, a handful of the graphites, and an even more select handful of the energies (
but no love yet for thermal coal).
Thus, as fluids and other liquidity river their way into our parched holdings, I must give our subscribers, the so-called TCR family, my short list of investments I am glad I bought when they were illiquid but near death. (We indicate which of these still is capable of accelerated parabolizing.)
1. Pilot Gold (
TSX:T.PLG,
Stock Forum) as discussed earlier this week and many times in the wake of our first visit to the company's Turkey TV Tower gold and silver project two years ago. When the shares sank to 90 cents recently, I bought more. Kinsley Mountain's gold property in Nevada is the driver right now for Pilot, and for partner and non-operator Nevada Sunrise (
TSX:V.NEV,
Stock Forum). I only pray, that at $1.55 Canadian, Pilot's financiers AVOID any scrum for fresh capital, as in an equity offering -- all too common when spec-appetite among North American and European investors increases. Moira Smith, there in Nevada as chief geologist for Pilot, says, "I was a little leery about what we were seeing when we got the first hole in this zone back (91CA autumn 2013) because there were some steep structures in it. I was not sure whether we were looking at a steep, structurally-controlled zone with little width, or a flatter, stratigraphically controlled zone with some thickness, or something in between. But now that we have 4 holes with strong results, all in the same stratigraphic interval, all roughly the same thickness, spread over 150 meters NW-SE, I’m starting to feel like we have a shot at building some tons in there."
2. American Sands Energy (
OBB:AMSE,
Stock Forum): This one is Utah, and one of the principals I know from here in California. It is what I would call a bargain-basement comp, or comparable, for the better known and well-funded US Oil Sands (
TSX:V.USO,
Stock Forum) in that part of America's heavy-oil landscape. I have been buying AMSE since about 20 cents;
the shares are 45 cents USA and easily could attain a fifth of the $130 million market value of USO. Even more, I believe, as AMSE continues its permitting process, which is relatively pro-forma in Utah; and benefits from a rolling capital raise that eliminates most debt and guarantees smooth sailing the next two years. That means the shares double here. (I own both AMSE and USO.) Says chief financial officer Daniel Carlson, “Last week we filed our mine permit, covering in excess of 150 million barrels of P-50 bitumen resource. We hope to have a similar valuation profile to that of US Oil Sands once permitted, a process we expect to conclude prior to year end.” Not easy to purchase, and yes, it is the suckass USA Bulletin Board; still, rivers of liquidity will reach even Utah's mesas if American Sands Energy notches near-term goals. AMSE's bitumen recovery process, by the way, one day will be seen as the model for environmental soundness; this is my take.
3. Sysorex Global Systems (
OTO:SYRX,
Stock Forum) is likely headed to Nasdaq after the computer services firm puts to bed the sale of fresh equity and its most recent quarter. I have been tracking this one since November 2013 and have known one of the principals for 18 years. I started purchasing in autumn 2013 at $1.50 or $2; it reached $9 today, but it is lightly traded. One day soon, perhaps next week after financials are released and the S-1 raise is behind it, Nadar Ali and Geoffrey Lilien's SYRX won't be so lightly traded. Based on publicly traded computer services companies that own some of the technologies they sell to their clients (big data, cyber security, telecom applications), Sysorex Global could see its market worth double from $9 a share and still sell for half the sales multiples of its North America peers. I own a scant 3,000 or so shares.
4. Sandspring Resources (
TSX:V.SSP,
Stock Forum) put in place a $148 million stream with Silver Wheaton (
TSX:T.SLW,
Stock Forum), and that lifted a wall of worry around the Guyana gold and copper prospector. I have been following this one, and visiting Toroparu in Guyana, for more than three years. The $55 million market cap Sandspring has a vast, I mean vast, property there, which is why SLW took a look and dipped in with cash. Today, SSP shares are on the second leg of a valuation leap; the first came in late 2013 after Silver Wheaton's stream became public. I won't purchase any of this at the present time because I probably know -- or have deduced -- more than I am comfortable disclosing. I will say one thing, I own very few SSP shares, and I would not chase SPP at 40 cents. But today's activity is a wake-up call. I can't get the company's CEO, Richard A. Munson, to comment on the 9 percent rise here Thursday, but there is that late-2013 release on the first Silver Wheaton drawdown:
$148 million stream. This is one flow that will lead to a heart of gold, and not, I believe, darkness. (Was that campy?)
5. I have to wrap this up so I can get out there and buy one or two other names. (Where is the cash coming from? Well, I am selling one or two losers, and one fairly big winner for our audience and here at home these first 12 weeks of 2014 is NUGT
(NYSE:NUGT,
Stock Forum), the 3x derivative ETF that parabolizes the junior gold miners. We also own JNUG, its junior-
junior cousin.) For those looking at opportunities that likely will bear fruit in the next three weeks, as stated to our TCR family, which has the headstart, I give two: Bitterroot Resources (
TSX:V.BTT,
Stock Forum) will see the fruition, or not, of many years of assays, shifted jurisdictions and excruciating spans of vaporized promise, in perhaps two or three weeks: Michigan platinum group metals assays. Mike Carr's Bitterroot is now liquid enough to see its $6 million Canadian market worth quintuple or more if the Vancouver, Canada, geologist and longtime CEO shows platinum-group metals (includes nickel) thickness, good grade and continuity and mining-friendly Michigan. I own a lot of The Root and have been purchasing more. It's 5 cents Canadian. Not a slam dunk, but I know some of the principals who have delivered the drilling cash to Mike Carr each and every time he has picked up the phone. ...
The other one I do not own and sold at a loss a while ago during that three-year parch
ment. Guy DuPort's West Africa Iron Ore (
TSX:V.WAI,
Stock Forum) is in the same part of the world that remains, along with (in my notebook) Cambodia, Mongolia, Colombia and Coney Island, my favorite for cheap and real gold and
diamond projects and other Cyclones. That western Africa: Ghana, Sierra Leone, Guinea, Burkina Faso) This WAI is a real speculation, as the stock can be bought at less than 2 cents Canadian. Concerns since 2011 and 2012 exploration efforts include Guinea title nightmares -- a challenge for everyone in the country; the reach for higher and higher iron-ore grades that the Chinese and others insist on; and metallurgical stuff, as in recoveries. I do not own the stock. I have met with Mr. DuPort over the months, and years.
** The two TCR 8 select investments that languish, even with February and March climbs from their respective graveyards, are Gran Colombia Gold and Solvista Gold. Both live in the land of Colombia, where worthy gold and copper projects go to die administrative deaths. Speaking of, is Continental Gold preparing for a sale of its Buritica asset there? I do not own CNL, but recent press releases might be the formalities that lead to such a sale. ... Finally, I have no plans to sell either of my platinum holdings in Africa: Ivanhoe Mines in South Africa (and DRC Congo) and Platinum Group Metals in South Africa.
---
Added to Thursday's TCR Report: Pilot Gold; MDM-Engineering
TCR Audience: I put my foot in my paragraph.
Pilot Gold followed its Kinsley Mountain glory holes with a $20 million equity financing.
This from a company that describes itself in numerous releases as well funded. As in: "Pilot Gold is a well-funded gold exploration company ..."
Great that it is a "bought deal: .... but bad on me and my USA feed and shame on Pilot Gold and Mark O'Dea for keeping that "well-funded" part in the boilerplate and then delivering a financing to the market.
I know the positive side: No warrants, and companies in resources finance WHEN they can, not when they NEED capital. Still, I feel flummoxed.
The dilution, I believe, is about 13 percent to 14 percent of the common; the bankers are NFB and Scotia. The buyers get the stock at $1.53 Canadian, and the shares after a halt are selling at $1.60 in a rousing market for gold stocks.
What can I say? I continue to own it. Pilot's paragraph writers suck wind.
I think Kinsley in Nevada could be seen soon as the best gold exploration project, Carlin style or not, in that state. The last time Pilot raised money was September 2012, I think.
https://stockhouse.com/news/press-releases/2014/03/12/pilot-gold-announces-bought-deal-financing-of-common-shares-for-c-20-000-160
MDM-Engineering: Congratulations to executive director George Bennett, CEO Martin Smith and team at MDM-Engineering, a South Africa services company that does feasibilities and other metallurgical studies and physical planning for mining projects, including Bulyanhulu in Tanzania and Kipushi for Ivanhoe.
I met Mr. Bennett on a tour of Ivanhoe Mines' properties in Africa in September 2013 and bought MDM shares in London in November. MDM announced it will be bought for all cash -- $109 million. That is about a 14 percent premium, or higher than where the stock was a day ago. See:
MDM
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Thom Calandra
@thomcalandra for Twitter