Medellin consultant and mining analyst Gabriel Bayona charts the $900 million loss of market capitalization suffered among public miners | prospectors in Colombia for first-quarter 2013.
TIBURON, California -- Nothing is changed this week except the fury of selling in metals equities.
Most indexes that measure metals equities -- GDX, GDXJ, NUGT, Canada's Venture Market and others in Australia, London, Johannesburg, the list goes on -- this week are experiencing furious selling. Daily volume for example on the GDX index of large-cap metals equities was more than twice its 10-day average on Wednesday.
Historic lows, on some indexes going back 12 years or more, were notched. Are they notched in steel, tungsten, iron ore? Or are the lows soft-marked in gold and prepared to meld into fresh low marks?
James Anderson, CEO of NuLegacy Gold (TSX: V.NUG), tells me of a New Hampshire friend and stock chartist who says the Fibonacci retracement low on the so-called XAU basket of big metals equities (largely gold and silver) is something like the 117 level. All well and good.
The XAU (Philadelphia Gold & Silver Index) sells in North America for 125 today, Thursday. It was as low as 121 during the day (i.e., today); in 2008, when there was far less equity paper issued by the Newmonts and Barricks of the world, the XAU went as low as 60!
Back in '08, when I was conversing with CEOs and big shareholders, including one CEO in particular of a large mine builder, he was most certainly grumpy, to put it kindly. His stock was hitting $2, even lower, and he was ready to nuke his entire shareholder base into submission. If only the stakeholders would listen, right?
I am deeply concerned that Colt Resources' financing with a Hong Kong investment firm is delayed. I wonder how the fund, newly formed, can be willing to stick to a soft commitment of 45 cents a share for Colt shares when the stock is now at 22 cents. I own a whack of Colt shares (GTP in Canada) at a far higher price than 22 cents Canadian, and I will, as promised, wait until the end of April to sell if Colt indeed is removed from coverage.
Our "safe" candidates, for subscribers of The Calandra Report, if anything is safe in this fury, are Pilot Gold, Gran Colombia Gold, Gold Standard Ventures, Atico Mining, Solvista Gold and Angkor Gold. The main criterion is capital. Each of these prospectors or producers has enough cash to proceed with aggressive exploration drill programs, mill rehab programs and feasibility pre-feasibility studies and resource revisions. In the case of Atico Mining (TSX: V.ATY), senior executives assure me they can raise a further $8 million at favorable prices "at the drop of a hat" to complete the 90 percent purchase of Miner SA's El Roble Mine and property in Colombia.
Thus: If Portugal's Colt Resources follows up on what looked to be a couple of months ago some $5 million from Hong Kong investors at 45 cents a share, well, I am a believer. If not, Colt is no longer for 'safe' investors; even, I must state, with the company owning what I believe are gold, tungsten and winery\vineyard assets in Portugal that exceed the current market cap. Nothing is safe from dilution except pure, unadulterated water. We shall know shortly in the case of Colt.
In the case of Mr. Anderson's NuLegacy Gold, the tiny company has a tall order ahead trying to raise capital in this market to continue drilling out Red Hill and advancing its Nevada properties. Yet the shares act well right now, perhaps because of the recent sojourn to Europe by Mr. Anderson and Nevada pioneer geologist Roger Steininger, NUG's VP of exploration.
In the case of Seafield Resources (TSX: V.SFF), cash appears to be there in the way of a reported creative debt financing with a South Africa | Australia entity. Yet the shares are hammered, just hammered: half the price of my personal purchase average and of our TCR buy-in price. I am displeased, to put it mildly ... and would like to see immediate insider additions to shares. (I do not like debt financings of any type, unless they are extreme late stage or perhaps (mezzanine) a few months at most before a change-in-control or a full-out mine build.)
Naturally, that leaves me open to critics who might say, well, Gran Colombia Gold (TSX: T.GCM) and its gold-linked and silver-linked notes are debt. Yes, they are, but there is metal, real metal, behind them. Plus, I know several savvy investors who own the bulk of those notes, which have a yield and trade, like everything else these metal-fatigued days, below par.
If GCM fails to deliver on promises of far greater output of gold (and silver) at Segovia, of far lower operating expenses at Segovia, and of movement on El Marmato in terms of a joint-venture partner, I get a slap in the face big time, and the destruction of my GCM equity. I think GCM shares are a bet against a market that holds Colombia right now in great disfavor. We shall see. (I get some satisfaction at least seeing the greater wealth that is coming into impoverished and scary-dangerous yet gold-rich Segovia, Remedios and the surrounding areas -- a gorgeous area not but a skip and a jump from Venezuela.)
In the case of Angkor Gold, the company after another payment into the coffers from an India iron ore company in exchange for concession rights in Cambodia, will have at least $3 million. In addition, CEO Mike Weeks vows not to dilute the 75 million-count share base at any time in at least the next eight months, and perhaps more. The company, I understand, is currently in early negotiations on what might become a third farm-out of a Cambodia property. Probably why the shares are doing so well. (The full Angkor Gold report will be out in coming days: PDF, photo files and more. I have been adding to my Angkor (ANK in Canada) stake this week, and I expect more "news" from the company in coming days. Angkor just named a new board member today, and I see more fresh faces ahead of us. I expect ANK shares to reach 50 cents from their current 42 cents in the next week or less.)
Note: Please see the expanded photo file, with daredevil biking videos in and around Phnom Penh plus geologists, tuk-tuks, crazy construction and NAKED firm AND JUICY Khmer flesh ... alas, coconut flesh. I give the Stockhouse link here for that, so please see the photograph link to our TCR Google-Plus Album within that article.
Thank you again to Stockhouse in Toronto and Vancouver for publishing the ANK report as a TOP STORY this week, thus generating a vast number of page reads and I take it, share purchases. Please see: TCR On Angkor Via Stockhouse
As for Gold Standard Ventures (TSX: V.GSV), even with some $8 million in the coffers, a $700,000-plus monthly incinerator rate can make even those seven digits (8,000,000) look scrawny to dilution-wary investors. I stick with Gold Standard Ventures with assurances from CEO Jonathan Awde, VP of Exploration Dave Mathewson and key large shareholders that Gold Standard's Railroad Gold (and silver) Project at the southern end of Nevada's Carlin Trend will reach a tipping point in terms of scale and grade, and perhaps as soon as the next round of assays. (Yes, GSV could raise money TODAY at $1 a share, but I happen to believe we will not see a financing at anything less than $1.20 a share, and perhaps more. Mr. Awde is a buyer, the other day at $1.12 a share, and even today, he tells me.)
Finally, we come to battered (and rarely mentioned in TCR) Bellhaven Copper & Gold (TSX: V.BHV). I always have felt a debt to Stockhouse and Ticker Trax audiences for having spent so much time in the transition of this Panama-centered gold and copper prospector. Interim CEO Paul Zweng and founders Patrick Abraham and Julio Benedetti did everything they promised me after I brought the team together several years ago.
Dr. Zweng gave us a resource at a freshly purchased La Mina in Colombia faster than any 1 million-ounce porphyry resource I ever have seen produced. Julio negotiated a brilliant and reasonably priced purchase of the COLOMBIA property from a long-time rancher at La Mina. The BHV board, with successful Panama and USA broker Patrick Abraham (now a Washington state resident), vended property in Panama (to Pershimco) and in Colombia (to new-co Braveal). Dr. Zweng brought in Iamgold as a large strategic investor. I think Iamgold is in for the long haul on the promise of La Cantera and perhaps Garrucha at La Mina.
BHV stock went from 20 cents to almost $1. I purchased 2.3 million shares, all in the open market and some at now insanely high prices. Patrick Highsmith, a big-company executive, came in as CEO, and ... everything ... plum....fell apart.
That Patrick is now gone. Dr. Zweng is back as a special adviser to Bellhaven. Julio is close to getting some major traction again in Panama. And the insiders, and non-insider but large shareholder Dr. Zweng (he manages a gold fund from Honolulu and California), tell me they are buying or trying to buy at these 10-cent prices. I will take a stab at trying to pick up BHV and BHVCF (in USA) shares at these woefully (woe is me) levels. (I succeeded in purchasing 40,000 shares Thursday at market prices.)
I will know more when I meet with VP of Exploration Brad Yonaka, CFO Millie Paredes (now president), CEO Julio Benedetti and board member Patrick Abraham, as soon as this week. I own more than 2.2 million shares, having sold about 80,000 shares earlier this year "in protest" for the big-company approach of the former CEO, Mr. Highsmith, who still gets credit for bringing La Garrucha, a neighboring AngloGold Ashanti porphyry target, on board; albeit a Garrucha process that seemed drawn out and nearly endless. My selling is now over.
Julio Benedetti, a Panama mining pioneer who hails, I believe, from Costa Rica and who attended Colorado School of Mines, has been in these straits before. As a banker told me at the GMP Securities conference late last year, 2012, in Panama, "Julio always manage to come out on top."
JB has Panama wired, and who knows, maybe in the next few weeks or months we will see fresh action on BHV's Pitaloza concession application on the isthmus. Julio B. owns a metric ton of BHV shares, as do Dr. Zweng, Patrick Abraham, Mr. Abraham's family and his clients.
My audience from the early days of Ticker Trax (now run by Danny Deadlock) and Stockhouse bought a LOT of BHV. So did I. I get emails and calls to this day. I am so far in the red on this one, and red in the face, that I vow to see this through. Bravo for the BHV board and team getting its mojo together here. Welcome back, Dr. Zweng.
I feel as a writer, a researcher with access to the metals biz and a shareholder and active investor, that it is necessary to get CEOs and other execs on the record on their goals and intents ... and this is what we do in TCR. This piece (Jonathan Awde, for example, and Mike Weeks above) is an example of that. I am not a shareholder activist, but I do get upset after long periods of time during which my equity is crushed.
I rarely swear, and definitely not in public. Still, I have no problem letting the world know who the executive and geologic and financial performers are in the metals industry ... and who the freaking dropouts are.