I didnt mean to hurt your feelings. I just don't agree with short term speculators. I don't believe that anyone is clever enough to consistantly forsee/beat the market on a regular basis. You may win once in a while, but there are too many factors to consiser that are out of your control, which means you do not have the full story, which means you will go broke over time. This is why I am interested in your future trades..I would like to be proved wrong.
My investment is pretty simple....I completed DD on DNG and discovered a phenominal company with fantastic growth opportunity, unique cash flowing business model, good fundamentals and great management. the company gives me sense of comfort to be able to sleep at night. I take a very good sized posiiton when it is undervalued and wait for the company to achieve it's goals.
Below are some links to a recent BNN clips regarding speculators vs investors for you. Also, I have included J. Taylors most recent write up... take a look at the numbers DNG will be generating once running at full capacity with the new mill...yup thats $31million or .87 EPS FYI - In a bear market we will get minimum 5 times P/E and in a bull market we will get about 25 times P/E. Right now at any given time, I am comfortable to say we are arount 10 times P/E ....so let's go half way between a bull and a bear market and use12.5 times P/E... this gives us a stock price of $10.87. That is without Tumipampa or any of the other exploration properties DNG has. So with this staring you in the face, why waste your time trading and take all the risk of making a mistake and having this company run away on you? You will feel sick if this happens and miss all the upside waiting for your next entry when the stock is catching up to it's real value.
I Can't Say Enough Good about Dynacor Gold Mines Inc.
Discipline does not always bring about the most excitement in the short
term, but longer term it can pay off big. I feel that way for sure about
our project generator companies. Unlike companies that have one or two
hot prospects for which the markets wait with baited breath for drill
results, project generators bide their time in methodically reducing
risk and enhancing returns by having other companies fund expensive and
risky exploration projects.
A major key to the project generator model is that it reduces share
dilution while keeping a significant share of the upside when something
big is discovered.
While some project generators do have some cash flow from time to time
by carrying out consulting services and getting paid fees as part of
their deals or, as in the case of Eurasian Minerals, significant income
from a Nevada gold royalty stream, most project generator companies do
not have earnings and positive cash flows.
Dynacor is not a project generator. But its CEO, Jean Martineau, has
exercised a great deal of patience in developing that company's business
model and more importantly its presence and respect for the local
Peruvian culture, where the company mills high-grade ore for small but
licensed gold mining companies in Peru. Jean has been very careful not
to dilute shareholder interests. His business has grown slowly for over
a decade but now it is starting to gather a critical mass so that its
per-share earnings are set to rise dramatically. And with patience and
growth from internally generated funds, Dynacor only has 35,820,167
shares outstanding. In discussing the company's plans going forward,
Jean has told me he would not consider issuing any new shares at
anything like the current share price and only if it would enrich
existing shareholders through further long-term growth.
In the meantime, as noted in recent weekly letters, Dynacor has a very
exciting gold-copper skarn target in the middle of a number of other
world-class deposits. Early exploration work gives reason for additional
exploration. This project at Tumipampa has a shot at hosting a major
gold-copper or copper-gold deposit. And the good news is that if they
hit something big, these shares should represent a major windfall
profit, because with exploration being carried out with internally
generated funds from its milling operation, there should be little if
any dilution in the process.
In other words, I see Dynacor as being very unique in that it has
growing cash flows from existing operations with very limited sustaining
capital expenditures (they do not currently mine but only process ore
from other mines), a very low number of shares and very limited dilution
going forward, and the potential to make a major gold-copper discovery
But even if the Tumipampa prospects turn out to be nothing significant,
the current growth for the company is impressive and should bode well
for a much higher share price over the coming few years. I say that on
the basis of the following back-of-the-envelope projections for this
Looking forward starting next year, the company expects to be operating
in its new milling operation, which will enjoy some cost advantages most
significant of which is a reduction in the power costs and also will be
accessible for larger-scale trucks. I'm expecting this new operation to
produce about 65,000 ounces in 2013 and then ramping up to as much as
105,000 ounces in three years, depending on the grades running through
the mill and assuming an expansion of the mill to 430 tonnes per day.
Applying conservative net cash flow rates of 10% based on historical
experience, the company should be able to generate between $10.7
million, or $0.30 per share, in earnings at the start of the new
project, and up to $16.5 million, or $0.46 per share, with annual
production levels reaching up to 105,000 ounces per year, depending on
the average grades processed and assuming the new mill gets expanded.
It is yet undecided but given the significant demand for the company's
services, the existing operation, which is producing at the rate of 220
tonnes per day, could be kept in production and the new mill could be
expanded upward to 430 tonnes per day, giving the company an overall
milling capacity of 650 tonnes per day. The company is conservatively
estimating 93% recovery rates, which it has gotten on an ongoing
basis. Average grades at the mill have ranged from about 0.71 oz
gold/ton to a more recent high of closer to 0.91 oz/ton.
At 650 tons per day and a grade of 0.71 oz/ton, the company would
produce 145,926 ounces per year. At a grade of 0.91, under those
circumstances, the company would produce over 187,000 ounces per year.
Applying a $1,650 gold price assumption and 35.8 million shares
outstanding, we could be looking at between $24 million ($0.67 EPS) and
$31 million (EPS $0.87 EPS).
For sure, these are forward-looking estimates and there is no assurance
those levels of production won't be met. But these numbers are certainly
within the realm of possibilities. Keeping our feet on the ground, based
on past performance, confidence in something between the high and low
levels discussed above appears to be a good bet. Then you have to ask
yourself, is this stock over valued or undervalued on the basis of
Then you need to add some value for the potential of Tumipampa to
deliver something significant. It is my understanding that we will soon
have some assay results. If they turn out good to excellent, you may
have to pay a lot more for this stock in the future.
I wrote extensively about this company in the monthly letter. You should
refer to that report in conjunction with this one.
speculators vs investors clip
clip #1 http://watch.bnn.ca/#clip791395
clip #2 http://watch.bnn.ca/#clip791397
clip #3 http://watch.bnn.ca/#clip791399