| To: Logain Ablar who wrote (3806) | 2/18/2023 2:06:16 PM | | From: sense | | | | Yes... there's clearly nothing there that will be left for shareholders. The bankruptcy proceeding they're conducting is not even pretending they're going to "fix it, and put the wheels back on". They're selling the mine to the highest qualified bidder, and once that's gone, that will be the end of Pure Gold.
It might not prove to be the end of activism and legal maneuver by the shareholders, though... as the things the management did in knowingly misrepresenting reality, what they knew about it, and when they knew it... clearly do appear to have them exceeding not only the bright lines in the limits of the law... but also, very likely exceeding the limits of liability protection in officers and directors indemnifications under insurance...
There will be nothing left of LRTNF for shareholders to go after... but, there will also be no ongoing source of support for those protections for officers and directors once the company and its revenue streams evaporate.
In the degree that's a correct reading of the situation... the failure and bankruptcy of the company will not afford liability protections to officers beyond the point of the completion of the firesale and wrapping up of the companies legal existence.
I have no idea if there are aggrieved investors intending to go after the personal assets of the perps...
I note that appears consistent with the patterns I see in the choices made recently...
So, I'm interested to see where the property ends up... as there is NOTHING wrong with the property other than prior managements mishandling of the effort addressing the geology, its financing, and their communications...
And, I'm interested to see what happens post BK in the "liability" discussion, given the egregious nature of the mis-steps that have occurred...
Also worth watching it because... its not obviously typical of what you expect to see occurring in Sprott related investments... and as Sprott is the 800 pound gorilla in the junior space, worth observing for that alone.
My primary criticisms of the Sprott organization, always, is that they are really quite good at sorting out "good ground" from moose pasture. I think you can rely on Sprott, within the limits of the knowable (which limit does impose real risks and limits in earlier stage projects, both for Sprott, and for all investors in early stage projects, generally, including those Sprott backs)... in Sprott not ever to be found backing pure or obvious puffery in potential. That does have the Sprott brand work in removing one major source of risks in early stage projects that resource investors always face... which is why the Sprott brand is as valuable as it is to those, like me, doing a lot of work while trying to do that sort themselves. But Sprott's team, or the mass in their efforts, show them as not particularly, or even "not at all" good in enabling the projects they back with quality management teams.
Some of that "comes with the territory" in mining... not just at Sprott's projects... which brings to mind two obvious cases in point:
Almonty... ALMTF... in one partial parallel. The Sangdong tungsten mine is an obvious gem... a world class "strategic asset"... so, when, as Wolfe, it was finally ready to be moved forward... Warren Buffett rolled in on it. Obviously, a quite good reason for shareholders to celebrate their great luck, or, skill in picking gems... to pair a best in class asset with a best in class effort. A long negotiation followed, in which the (usual in stinky pinky) corruption of the existing owners and management got exposed and had to be "fixed"... to bring it up to the squeaky clean, quality of performance, and employee and management excellence standards that are the hallmark of the "good management" that truly define Buffetts market successes. They made a few of the required changes... but, dragged their feet... and, unable to "fix it"... Buffett backed out. So, now its run by the Almonty team... who continue dragging their feet, and self dealing, in order to run it as "their own" in a much less than world class effort... Very disappointing. The value... is likely to never be realized as it should... as by the time they get it done... the window of opportunity will have passed. Or not... but, in any case no obvious reason to own it... rather than watch it... and "wait for it"... on the off chance circumstances do for them what they're unable and unwilling to do themselves.
And, pet peeve... U.S. Silver... now USAS... I owned it... from early on... when it was exceptionally well managed... even profitable at the bottom of the market back in the day, post 2008... while improving itself consistently... very well positioned to be a world beater when the cycle turned... And, then, Tom retired... and the board went stupid, accepting bribes to sell out to shysters. The outline of the property, the company, and its history is on Wikipedia... but fails to tell the story in a way that matters to investors...
Hecla tried to buy it with a low ball offer... which, in hindsight, shareholders should have accepted, but didn't, not yet knowing how badly they were about to be raped by the new management.
At the time, the Idaho mines were profitable, improving... no debt... $20 million in the bank... with the stash growing over time as the well managed mining effort outperformed... surviving at $10 silver... making good money with silver at $12-$14... growing the cash even more rapidly at $17. New management planned to take over the world... got gulled into a number of stupid deals... mismanaged Idaho and led it to underperform, then atrophy, then fall apart, and lose money... and, bad managers, they pissed off the locals in their new Mexican ventures, so labor disputes shut them down. They had a sweet deal in a cash cow of a world class mine... effed it up... pissed away the cash... tried to fix what they broke by borrowing... and ended up losing money and $20 million in debt... which vastly understates the damage done... as they also did a big reverse, and now have more shares out than they did before... Investors who failed to heed the warnings got killed.
It's a Sprott related issue, too... as their failures, and the "deals" they did as their bad management dug the hole deeper... were "enabled" by their borrowings from Sprott... who has converted their obvious mismanagement into Sprott's ownership of almost (?) half the company... And, still... see no changes occurring to get rid of that horrific management... which virtually ensures that, at some point, Sprott will own the whole thing... and the "investors" will be shown the door... just as they are, now, at Pure Gold...
It's an obvious instance where Sprott is a clear beneficiary of others horrifically bad mismanagement... with Sprott clearly having no reason to help solve problems that benefit Sprott, as crap management are giving them ownership and eventual control of the company's core "world class" assets...
LRNTF, ALMTF and USAS similar as each have (or had) worthy enough, to world class, or best of type assets...
Still, the important point of this post... at U.S. Silver, the primary asset actually turns out to have been Tom Parker's management... because, at all of these "opportunities"... a "world class asset" means nothing useful... as long as the management is no better than market averages, or even more incompetent and inexperienced than that, or, wholly corrupt.
Worth noting that "wholly corrupt" management doesn't mean there aren't ways of making money from the potential while taking ownership of quality assets... it just means... it won't be the shareholders getting any benefit in result of "owning" a "world class asset"...
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| To: sense who wrote (3807) | 2/18/2023 4:06:07 PM | | From: Logain Ablar | | | | Hi Sense:
The underlying theme is you need good management. A good company / prospect but also good management.
Hard to determine sometimes.
Helca, I have invested but recently sold, luckily before the recent drop. I owned Alexco and took a hit as their management couldn't bring the project to market. Helca did a good acquisition BUT issued a lot of shares to purchase the royalty. Will be a good investment at some point, just not yet.
Argonaut, another one with a good project that blew up last year. Now headed by Richard Young who did well at Terranga (although not sure if I liked the sale to Endeavor, only a 7% premium).
Alexco, Terranga and Endeavor were 3 I found out about on the Sprott website a few years back (maybe 8).
Many of the Canadian miners have blown up due to covid delays and then supply / labor / cost issues. I think Argonaut's mine development increased by $700M. Not all of the increases are management's fault but how they manage the situation is (I don't mean the misrepresenting like we saw at Pure Gold).
Good luck out there. |
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| To: Logain Ablar who wrote (3808) | 2/18/2023 9:17:59 PM | | From: sense | | | | I think one of the obvious lessons is, yes, good rocks, good management...
But, you also need... good financing... and good luck in avoiding the realization of risks... which mining has more than enough of to explain why mining stocks tend to decline rather than rise as companies shift from exploration to development... as the risks in development are that much greater, certainly that much more expensive when risks are realized.
I've seen that element a time or two before, too... in transitions from bear markets to bull markets in the metals...
So, that other thing you need... is the market support required to solve the financing issues...
A bull market will solve a lot of problems in the mining space... even in those with crappy rocks and crappy management... and no realistic change of ever enabling a success...
So, the goal is to sort the best rocks... the best management... the best "potentials" qualified to enable funding themselves on decent terms that benefit investors rather than pirates...
And then WAIT FOR IT... so that you own them at the bottom of the market... at low tide... right before the tide reverses and starts coming back in...
It looked like we might be there, at the start of a new bull, back in 2021... but, no...
And, a lot of what I looked at back then... is cheaper now... even while companies are continuing to make steady progress in proving up more, while advancing projects towards production... or, future financing, etc.
A lot of good trades to be made off the post-Covid bottom... that have proven to be "trades" rather than investments...
But, from the failure of the "breakout" to the lows in Oct 2021... and throughout 2022... I've not been trading...
But, I've also not been selling any of what I own... while waiting for opportunities to buy more...
Now, it looks like Oct 2022 defined a new bottom... and a lot of quality rocks with quality management are on sale now, again... as much or more than they were in 2020 ?
And I do see interest in the sector picking up again...
NOT among investors... but, among the insiders in mining companies, who are "making moves" now to prepare for what they expect is coming... that requires them to make preparations ?
That's NORMAL market behavior... bear markets, and the lows in stocks, don't end in accelerations... they end in... flat markets... and apparently endless drift... inducing no sense of urgency at all...
And, a few months after a bottom, you look back... notice you've "drifted" higher by 100%... which is still a small fraction of prior high prices... and still, no one is paying attention... at all ?
Looks like where we are now... to me.
But, I'm "doing my own thing"... as always... reading my own tea leaves... not following "pundits" and perma-bulls flogging their picks ?
Still, there are guys worth listening to... and utility in listening to them... when the timing is right ?
I might check in on Rick Rule... ? |
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| To: Logain Ablar who wrote (3808) | 2/18/2023 10:36:46 PM | | From: sense | | | | Also true, of course, that a bull market in silver and gold will move all PM stocks higher...
But, "moving all" does not mean "moving all, equally"...
Hecla at $5... off the 2021 peak... but not the $1.30 is was in 2019... Look at the long term chart for it... and "now" looks more like the shoulder of Sept of 2012 than "a bottom"... like that in 2019...
And, back to the highs of 1987... at $20+ ? Hecla has a pretty well defined range...
A lot of the juniors, though... might be $1+ at a trading peak... and fall to pennies at market lows... with nothing at all changed in "what they are / what they have".
What a trade in "a bull market" is for Hecla... is different than what it is for a lot of those small explorers... in terms of change potentials... and time.
I "try" to focus on finding those explorers with the rocks, the management, the team... "the situation" to enable them to deliver good trades when the market is willing to support them... and to succeed well enough in finding to get bought out... or transition to become successful miners... and then become future majors...
A bit of luck in all that... and in timing it with a rising market... a bull market... which I will define as one that is sufficient to convert "miners" as a group from "trash" into stocks everyone wants to own... and they can be transformational...
But, the pennies are easily made hyper-reactive... without the rest of the market changing THAT much...
The market ignoring them... or the market paying a bit of attention for a while... is by itself the driver of change on the order of 10 or 20X...
Hecla's swings from $20 to $1... and higher again to $10 or $12... $5 now... pale in comparison to stocks that have swung from $0.20 to $0.01... and back ? There's no difference in percentage terms... between 20 to 1 and .20 to .01... but there is in the fact they can do that range shift easily enough in a few years... or a few months... a couple of weeks... ?
Link the two, though... and not impossible to get pennies to dollars, tens of dollars, etc. That does require a real bull market... not just "a bit of movement in mining stocks'... but a shift in the investment case for putting money into mining... because the metals are in short supply and we need more, which justifies the investment case in making more available... and, with a booming demand for resources, and not just resource stocks... it making producers profitable enough to justify buying them as you might any other stock... because it makes profits and provides a nice return in a higher percentage yield... than other investments offer.
We haven't had a real bull market in resources in a long time... probably since the 80's... as, its been about that long since we've had domestic demand driving domestic supply... and it probably doesn't make a lot of sense to fund development of a smaller scale copper miner in Alaska, Arizona or Nevada... if the costs are too high, the metals content too low, while all the fabrication demand is in China ?
And, of course... that real bull market requires a confluence in events and circumstances... both altering the demand for the metal, and the demand for the stocks... still needing an expectation that finding will allow to BEING ALLOWED to mine what you find ? So, the political situation matters, too...
Its fun, for me... doing the work... and complex enough, in the whole, to never get boring... yet, to do it as well as it can be done... you need to "be there" when it is too boring for others to bother with... paying attention at the time they're "boring" the holes and showing you value others are ignoring ?
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| From: sense | 2/26/2023 11:13:38 PM | | | | | | TLRS, IAUX, PYCMF
Looking anew at Eureka District Deposits
i-80 Gold Expands High-Grade Mineralization in the Hilltop Zones at Ruby Hill
The Ruby Hill a well known past producer that, under i-80 Gold, is finding more there...
I think I wasn't a huge fan of the spin out, from Premier, at the time (April 2021)... at around $2 then, has ranged from $1.50 to $3... Yahoo says earning $0.65 a share with PE 3.62... which seems it isn't enough to keep the machines running:
i-80 Convertible Debenture Private Placement Upsized to US$65 Million on Strong Demand
At Ruby Hill, though, they're finding:
Feb 23: i-80 Gold Expands High-Grade Mineralization in the Hilltop Zones at Ruby Hill
Feb 8: i-80 Gold Intersects 12.3 g/t Au Over 10.7 m in New Target at Ruby Hill
More interesting here, in context:
Feb 21: i-80 Gold Announces Ruby Hill Technical Teach-In
The presentation will highlight the multiple new discoveries that have been made on the Property since mid-2022 including the Upper and Lower Hilltop Zones which host highlight intercepts of up to 515.3 g/t Ag, 28.9 % Pb, 10.5 % Zn & 0.9 g/t Au over 28.3 m in hole iRH22-43 (Upper Hilltop). It will also detail the significance of the skarn and CRD mineralization, recently discovered in the East Hilltop Zone as well as the Carlin-type gold mineralization intersected in the 428 Zone target.
So, after long neglect, it appears the Eureka District as a whole is on track for some serious effort in expanding the understanding of what's there, and where it came from... and where else it might be useful to spend some time and $ looking...
I've been following Timberline here on SI for a long time... through its various ups and downs...
It's long been obvious that the Eureka Project property they control is a gem... or that, at least, somewhere within it, it is likely that it contains a gem or two. But, its been enormously frustrating watching them avoiding doing the things that seem most obvious in looking for it... repeatedly... over and over... ad infinitum... They've always assiduously avoided looking at those spots where there are known outcrops of high grade... rolling their eyes if you suggest it worth a few holes to test it and perhaps find out what it is and where it came from...
With less than inspiring successes... loss of confidence became a lack of funding, a reverse split, multiple management changes, convertible note financing... and a once spectacular list of projects in the portfolio, now down to only three... but, at least, that short list still includes the far too long ignored Seven Troughs.
Still, the crew they have are experienced and competent enough in the small picture stuff, and survived for a while, recently, doing work for others, as they landed a then mysterious job doing the field work for someone (Barrick), at what is now TLRS's Paiute project: "Timberline explores the property as the operator of an earn-in Joint Venture (JV) agreement with a subsidiary of Barrick Gold. Currently, Timberline owns approximately 75% of the project". But, that, was really reconnaissance work being done by the major, both "on the cheap" and "on the down low" by tasking it to TLRS, while less hoping to "find the big one" than to better understand the regional geology and its fault related offsets relative to the bigger deposits known just across the way at the north end of the trend... so, probably, testing out theories in a pet project of Quinton Hennigh's and his speculations about that...
That work looked like it was finally set to pay off and change things for TLRS , recently... after Quinton Hennigh (et al) took control of the company, and redirected their efforts back into "start with the basics, work on understanding the big picture"... and finally got TLRS to quit plinking at and expanding known low grade deposits... and re-focused them on understanding structure, structural controls, and deposit origins. But, then, after a burst or two of excitement, Hennigh left to join Crescat... in August of 2021. But, he succeeded in getting them to shift focus, if not in getting them to sustain his own intensity in focus.
Around the same time as that change of focus occurred... another operator moved in up to their north, and started making a bit of noise re "likely connected up to" and poking at the same "new potential" as was being "suggested as possible" if not outlined by TLRS, then. That effort looks now like its recently morphed through acquisition to become a subsidiary and the core project of PYCMF - Paycore Minerals who have an impressive team, have just raised a bit of money... and are going to drill a few holes in a second round effort...
When they started, I figured they were a group of amateurs planning on staking around what TLRS's shift in focus was showing, hoping to ride TLRS's coattails, on the chance TLRS were to succeed in proving up something interesting. But, now, its pretty clearly the opposite... as others seem they are learning more, faster, from TLRS's efforts than TLRS has... Now looks far more likely that TLRS is about to be outclassed in "finding" what's been there all along in their own backyard... only after they let others sneak in and take positions ? But, at least... TLRS finally stepping up now to play "me too"... hoping to ride their coattails, now, instead ? Only, we know well enough from experience what TLRS means when saying, about this "NEW" target (with a long known history in high grade)... that they "plan to aggressively explore."
Worth noting, too, that the money Paycore just raised to fund a second round drilling effort... is a couple of million more than the market cap of TLRS.
That their property package isn't green fields, either, but... a known... with prior work done by Hecla, ownership passing to Homestake, and then Barrick (again) who appear to have spun it out into Paycore... perhaps only after the addition extending claims to the south ? Their first effort has proven "more" of what they already knew was there... in the northern portion.
PAYCORE MINERALS INTERSECTS 27.4 METERS OF 10% ZINC, 1% LEAD, 79 g/t SILVER and 8.0 g/t GOLD, INCLUDING 13 METERS OF 16% ZINC, 1% LEAD, 110 g/t SILVER and 11.1 g/t GOLD FROM THE POLY-METALLIC FAD PROJECT
Not at all certain, from that, that there is immediate hope for TLRS that is justified based on that "known" in Paycore's FAD... but, the PR on that prior work expanding that "known" notes, cryptically, that there are other high grade holes that occurred too far outside the resource being developed to include reporting them, and: "Upcoming drill programs will also target the under-explored Jackson Fault where i-80 Gold made their recent discovery of high grade CRD at their Hilltop Project". It being the Jackson Fault, rather than the Ruby Hill, that extends south and connects the historically successful projects to the north into the potential in the "near" brownfield, historically interesting, and "moose pasture" parts of TLRS's huge Eureka Project ground. Plus... need to poke at any of that "similar" in any potential offset faults, like that displacement you see occurring along the Ruby Hill Fault.
So, while its not remotely close to how (or, when) you'd like to have seen it happen... perhaps, now, if Paycore and i-80 can do the work in developing the geological picture that TLRS has not... and link that picture in to locating the probable occurrence of CRD, and Carlin-type rocks... which TLRS's own drilling has already been finding bits of...perhaps TLRS is finally on the verge of succeeding "big" at Eureka... even if only in spite of themselves... ?
And, at $0.10 now... even without any of that "new" potential becoming more real... even only as a function of the timing in relation to the cycle, if all TLRS did was 'more of the same" ?
Probably not the most enthusiastic update I've ever done... but, I've always been a fan of their rocks... if not the other aspects... which.. are hardly unique in the shallow end of the junior mining pool... which currently has TLRS suffering a bit in comparison with the new neighbors deep pocketed approach...
More potential leverage in TLRS... along with more risk... if not so much in price risk, from here.
But, the market cap... also means a risk that "finding"... might not let you hold on for the big ride that long ?
Who owns TLRS, now ? How much is Barrick... related associates... or others who might sell you out rather than preserve your ownership interest... if there were a success ? For now, at TLRS, those are still the sorts of problems you only wish you had...
If I'm right... that we're at or "nearing" a bottom in the miners... "soon" ?
Could likely do worse than snagging a few here... |
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