Accelerating gains in bullion are boosting the prospects of mining companies with secure operating teams and actual truckloads of ore that awaits processing.
Translation: Mind-blowing exploration results of thick and rich veins, certified by minerals labs and delivered to the public in the form of press releases, are not cutting it. Progress reports that imply years of more progress reports, economic feasibility studies, permitting, financings – well, up the down hole with that.
This is more Geophysics 101. Resources, as in ‘Here is what we think we have down there,’ are getting little respect as gold approaches the $1,000-ounce mark.
As informational as progress reports on big digs are for shareholders, they mean little in the world of profits unless a miner’s operating team has been in place for years, kicking up the dust, flying the four-seaters in and out of the desert, ‘coptering up and down the mountain.
I got a nostalgic buzz when subscriber James Marx, a dear friend from Paso Robles Wine Country in California, sent me a reminder of the glory days. Made me feel a bit like Alex in “A Clockwork Orange,” but the good Alex that is, the one who turns out well in the complete British version of the Anthony Burgess novel. Anyway, Jim harped on about past, present and future gold trends and sent me this oldie from 2003: Bullion Trader Sees Stars. Interesting how so little has changed in five or six years when it comes to bullion. Thanks Mr. Jim. (See 2003 article.)
It is called reality – the wake-up call that all investors and bankers and equipment leasers have gotten in the past 18 months. Those who fail to read reality in the numbers are, pardon me please, so, so vein. (Yes, vein.)
John Kaiser, who lives across the S.F. Bay from us in northern California, needs little introduction as a skint-skinned searcher of extreme CHEAP. Kaiser is, as his service calls itself, a bottom fisher.
His list of companies that sell for pennies in the world of mining is probably longer that ever it has been.
Kaiser tells me, “The companies that have had these operating teams in place for five years just waiting are going to command a premium, and when the race to production begins, when gold is $1,400 an ounce and it means an extra $500 an ounce to the bottom line, well ….”
One of those prospects likely will be among this year’s crop of juniors that transform into mid-tier gold and gold-equivalent producers and deliver heady profits to shareholders, albeit at extreme risk.
In Ticker Trax Issue No. 6, published Tuesday, we mark that producer with a star and name it Planetary Prospect No. 3. (See: www.tickertrax.com).
An excerpt from our subscriber report, which is generating excitement among a new subculture of Ticker Trax’ters: -- “How often do you find a company poised to become a mid-scale producer overnight? With mining costs coming down?” a longtime mine researcher and writer, Jay Taylor in Queens, N.Y., tells me.
Yes, success is all about the vein. But instead of inferring the vein’s properties and glossing it over in progress report after progress report, what commands respect TODAY is the 30-grams of gold equivalent per tonne pulled from the vein and piled high against a waiting line of massive trucks.
The trucks deliver the ore to the mill, the mill delivers profits to the owners (shareholders).
That is all for now.
Ticker Trax By Thom Calandra explores planet Earth for a handful of stakes and strategies that offer the prospect of excellent, in some cases cosmic, returns. The new service is for those who can cope with stratospheric levels of risk attached to a handful of planetary prospects. (Please see www.tickertrax.com.)
Bonus: Please nip into our Ticker Trax™ discussion group – only on Stockhouse.
Phoenix in February
We will be presenting at the Cambridge House metals show coming in Phoenix this month. The show, at a gorgeous little hotel in Glendale, just a mile or so from spring training baseball, will feature a silver summit. It is free for those who register now. Lots of friends will be there. Please see: http://www.cambridgehouse.ca/ch_phoenix2009.html.
THOM’S STORY: Thom Calandra during 27 years of road work has helped his audience find value in a quagmire of investment choices. Thom co-founded CBS MarketWatch, MarketWatch.com and FT MarketWatch in Europe. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom fancied $300-ounce gold before that metal became an investment rage. Thom visited bioscience companies, metals mines and energy companies in a search for reliable sources and fine planetary prospects. (He was imperfect in at least one regard, having settled a U.S. Securities & Exchange Commission complaint in 2004.) Thom's novel PABLO BY NUMBERS was completed in 2008.
HOLDINGS: Thom’s cosmos of holdings is listed for free Stockhouse members on www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. He and his family own recently minted gold coins. For the free ThomWatch, please click here. For subscription service Ticker Trax, please visit www.TickerTrax.com. Thank you!
Ticker Trax™ is published by Stockgroup Media Inc. Ticker Trax is an information service for subscribers and neither Stockhouse nor Thom Calandra is a broker or investment advisor. None of the information contained therein constitutes a recommendation by Mr. Calandra or Stockhouse/Stockgroup Media that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Ticker Trax does not purport to tell or suggest which investment securities subscribers or readers should buy or sell for themselves. Subscribers and readers of Ticker Trax should always conduct their own research and due diligence and obtain professional advice before making any investment decision. Ticker Trax will not be liable for any loss or damage caused by a reader’s reliance on information obtained in the reports. Subscribers and readers are solely responsible for their own investment decisions. Opinions expressed in Ticker Trax are based on sources believed to be reliable and are written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. All information contained in Ticker Trax should be independently verified with the companies mentioned. The editor and publisher are not responsible for errors or omissions or responsible to keep any information up to date or to correct any past information. Ticker Trax does not receive compensation of any kind from any companies that may be mentioned in Ticker Trax. Any opinions expressed are subject to change without notice. Owners, employees and writers may hold positions in the securities that are discussed in Ticker Trax. PLEASE DO NOT EMAIL THOM SEEKING PERSONALIZED INVESTMENT ADVICE, WHICH HE CANNOT PROVIDE. Copyright 2009 all rights reserved.