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Rockwell Diamonds (T.RDI): 40 cents with 96 cent book value

Danny Deadlock Danny Deadlock, TickerTrax
2 Comments| August 15, 2014

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Stockhouse Ticker Trax is published to subscribers every Monday (annual cost only $195). We focus on best-in-class high growth small companies trading on the TSX and TSX.V between 5 cents and $3 with a market cap below $300 million.

Equity Analyst Danny Deadlock has 30 years of experience speculating on Canadian penny stocks and targets capital gain opportunities and diversification in metals and minerals exploration, energy, and technology.

For the experienced investor, Ticker Trax provides an extra set of eyes and ears (idea generation) and for those learning to invest in micro cap stocks, we provide stock picks and market education.

Subscribers receive; (1) new research (stock picks) weeks in advance of being featured on this weekend column (2) exclusive access to our list of junior gold exploration companies (critical for peer valuation), (3) exclusive access to our list of Cash Rich micro cap companies (our Virtual Vulture Fund) which contains 80 companies with almost $3 Billion.

Both tables are updated monthly.


 
ROCKWELL DIAMONDS (TSX: T.RDI, Stock Forum) (40 cents)
www.rockwelldiamonds.com
 

  • Producing diamond mines that include very large Investment grade diamonds
  • Shares Outstanding: 54 million / Market Cap $22 million
  • Approx. Net Book Value:  $52 Million (96 cents/share)
 
[Beneficiation diamond pipeline of approx. 6,300 carats:
$ value not included in book value - See my notes on page 10 of the full report.
 
 
RDI Estimated “in situ” (in the ground) reserves of 1.5M carats – potential value near $1.8 Billion
 
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Espial (ESP.T $3.01) was a perfect example of an ignored public company and the benefits of patience. October 2012 I featured Espial to Ticker Trax subscribers at 52 cents and then again January 2013 at $1.02. The stock price struggled throughout 2013 as there was no interest and by the summer it was at 40 cents.
 
It started to move by Q4/13 (with the same fundamentals) and now is 600% higher than the summer of 2013 - yet it had similar revenue and the industry outlook was just as good. BUT the sector was doing well in Canada and they managed to finally attract an audience of retail investors including some institutional money.  In this case the patience would have paid off dramatically.
 
Many investors will avoid Rockwell simply because they are in South Africa – a region well known for labor issues and strikes that have paralyzed the platinum industry in 2014 and also hurt gold production. It is important to note that these industries in South Africa are centered around old mines that in the majority of cases are incredibly deep (the miners work under terrible conditions).
 
Labor issues are a risk with any mining operation in South Africa but Rockwell is far removed from the major centers seeing all these problems and their mining operations are “surface”, not underground.
 
South Africa in my opinion is not enough to offset the ridiculously low valuation we are seeing on Rockwell Diamonds.  I often see grassroots exploration companies trading with far higher market caps than Rockwell – yet RDI has healthy producing mines in a unique industry with growing demand and shrinking supply.
 
The research is too large for this column but you can read my full 14 page report by clicking HERE.
 

 
  ** TWITTER NOTE:  I maintain a twitter page at - twitter.com/tsxalerts  
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Disclosure: Danny Deadlock owns 125,000 shares of Rockwell purchased in the open market
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Tags: INDUSTRIAL METALS & MINERALS

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EOIM
The entire junior mining industry has over the past decade proven to be a BAD business model. More than 20 billion dollars was raised by juniors in TSX, yet, not a single viable and profitable mining company has been created from this investment. All junior mining companies are worthless. Investing in junior mining companies is not different from buying a lottery.
2.5 stars
August 15, 2014
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Rusty7
Targeting 95 Cents on 14-cent Keek (V.KEK) Read more at http://www.stockhouse.com/opinion/ticker-trax/insights/2014/07/18/targeting-95-cents-on-14-cent-keek-v-kek#1UE4JsfrYJyDx2Yv.99....... This guy is a fraud
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August 28, 2014
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