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7/30/15

A comment on Banks Island Gold (BOZ.v)

I've never looked at this Louis Lobito Little Wolf Casey Research pump job more than fleetingly, but after all the mine closure/suspension hoo-hah in the last seven days, and then including the way Lobito reassured his followers last Friday that it was a hold and the suspension was much ado about nothing but then this Thursday morning did a 180° turn and called sell on the stock (when halted, then claimed he was out at 9.5c when the stock dumped to 5c), all this BOZ silliness had caught my attention. And then of course the CFO resigned suddenly on Monday. Nice touch.

So anyway to get to the point of this post, while checking SEDAR tonight I noticed that BOZ.v had filed its quarter this evening so with interest piqued, I checked its financials for the first time ever. 

Seriously. I mean, seriously, how can anyone in their right mind like a company with a balance sheet like this? Let alone somebody as dangerous to other people as Lobito who recommends it to other people. Especially when those people are a bunch of naive sheeplike followers who require a little expertise in the sector, not tripledumb investment advice? And on checking back this evening we note that Louis Lobito Little Wolf James has been reco'ing this stock constantly since 2012 since prices of 76c (and his "stink bid" price on it was 45c...did he tell you to back up the truck when it went through that price?) and all the way down. 


This is madness, it's the type of thing that people who do not understand financials buy. Look, that's $11.2m in near-term financial liabilities, less than $170k cash, all on top of a mine that even if it was working right gives tiny gold production per quarter that makes an operating loss at $1,200/oz. There's no way, repeat no way, as in NO FREAKING WAY that debt gets paid without cash crunched to zero and beyond and that means even if BOZ can find somebody stupid enough to lend it some more cash the shares are going to be decimated even further, one way or the other. But you didn't need to know the May financials to come to that conclusion, it was already baked in. Obviously.

I knew Louis James was stupid about geology. I didn't realize how stupid he was about financials. The above is just plain embarrassing, it's amateur hour level.

And good morning to you, Porter...

...so glad you could make it.

The best quarter I've seen from a junior producer so far in 2q15 is...

..Teranga Gold (TGZ.to) (TGZ.ax). And that's good because I own some.

The thing to like isn't the production, which was slightly low due to lower than expected mined grades and head grades. What's to like is that even after producing a couple of thousand less ounces than I'd have liked in a perfect world its costs items were low, both on an absolute scale and on per-ounce metrics. With AISC at U$948/oz in what's going to be the softest production quarter of 2015 (and 2016 and beyond, most likely, as there's better grading material coming online soon) TGZ is still solidly profitable at even our new lower summer sale gold prices.
  • It's still a 200k+ oz per annum producer.
  • It has U$38m cash in the bank.
  • It's done all the heavy lifting on investment and corporate finance
  • It's profitable at current gold prices
  • It has an optimum community and social risk profile.

And you get all this for under CAD$200m market cap. Today's NR here.

I'll bet you cashmoney that when you see its 4q15 production results and guidance for 2016 you'll be saying "Damn, how the devil was that at just CAD$0.56 back in July?".

We'll do the charts on Sunday, here's just one:





Gold: Something's gotta give (x3)

We note the price of gold returned to U$1,080/oz this morning and promptly bounced off the level again. A chart:


A piece of music.



Lake Shore Gold (LSG.to) 2q15 numbers

A lot of reports to do today, which is nice I suppose as it keeps me out of trouble. Lake Shore Gold (LSG.to) (LSG) reported this morning, here's the NR and just two charts for this post:

This one, the ops overview, holds no surprises because revenues were pre-announced as well as cash costs, which means we had a very close idea already. It's in-line.


But one good for comparative purposes is working cap, note the different direction to that of the Timmins Gold (TMM.to) chart posted here last night. 


That's because LSG's net profit may have been modest but it was a genuine one, not a tax claim fakey prop. Again let's underscore a simple fact: It's far more difficult to make the balance sheet look good than it is the P+L. The balance sheet requires real positives, not accountancy massages.

That second chart is one of the reasons why LSG's price has done this compared to TMM's during 2015.



There are other reasons too. We discuss those on Sundays.

7/29/15

Timmins Gold (TGD) (TMM.to) 2q15 results

Timmins Gold (TMM.to) (TGD) filed its 2q15 late this evening (never a good sign) and as we did with New Gold (NGD) last night, here are just three charts picked from dozens in the database to give a flavour:

The operations overview. See the problem?


Costs are fixed, revenues are dropping. With gold where it is compared to the quarter just gone, it's going to take some serious changes to stay with even gross profits at TMM, let alone pay the niceties of life like G&A and things. 

Next working cap as TMM managed to return a small net profit thanks to claiming some tax relief, but operationally they lost out and you see that here. 


Cash treasury dropped by $3.4m, working cap by $7.9m. 

Finally, the equity per share dip shows just how silly and dilutive the Newstrike purchase was. 


So after this, please don't tell me how Lukas Lundin is some kind of infallible moneymaking machine, between him and Bragagnolo this is one big dumbass error staring at you.

Quebec geologists prohibit innovation

On June 23rd Integra Gold (ICG.v) announced its "Gold Rush Challenge", idea to crowdsource "the next big Val D'Or discovery" (or something) that would put up a prize of up to CAD$1m for the person or people who helped ICG make a big hit win. Here's an excerpt of the NR:
The Gold Rush Challenge
Online prospectors will analyze and interpret the data to come up with a plan on where they think Integra has the best chance of making a major gold discovery. Further details on what specific types of submissions the Company is looking for will be announced in the coming months, prior to the database being made public in September. 
The prize of CAD $1,000,000, which will be broken out into a number of categories, will be awarded to whomever comes up with what the Company and the competitions board of advisors believe is the highest probability location for a major gold discovery. Integra has already made significant headway in raising the award money through sponsorships and plans to announce the winners next March in Toronto at the PDAC mining conference. continues here

At the time your humble scribe registered the idea and thought it interesting in that out-the-box way, without going overboard on the idea. At least somebody's trying something different was my main mental comment. Didn't think much else of it, though (not really my neck of the woods).

Anyway, Quebec's geologists don't want mining companies doing anything stupid such as making money or being innovative or making themselves popular with the general public. IKN today intercepts this mail sent to ICG a few days ago by a lawyer representing L'Ordre des Géologues du Québec (aka Official Canucky Rockbanger Club):


Shorter: We're going to protect our jerbs from your smartass ideas. 

Gold Resource Corp (GORO) finally tells us about some of its insider selling

Today this was filed to The SEC. It tells us that when David Reid resigned as head honcho of Gold Resource Corp (GORO) in late 2013 he held 3.19m shares of the company. Then between January and June 2014 he sold 544,700 of those shares (at what looks like an average of U$4.90 a pop), at which time his holding went under 5% of total shares out.

And we get to hear about this selling over a year later when the shares are less than half his selling price. Cool disclosure, guys.

And of course, once he went under 5% holding he didn't have to disclose any more sales, so there's no guessing on whether he still owns his 2.5m or so. If you want my guess, he sold them to you suckers between July 2014 and now.

And yes, David Reid is father of current head honcho Jason. Cute, yeah?