Thoughts from Myron—October is Prospect Generator Month
by takeprofits | October 18, 2013 5:06 pm
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Source URL: https://www.stockgumshoe.com/2013/10/microblog-thoughts-from-myron-october-is-prospect-generator-month/
No typo….I was referring to your warning not to be spooked into selling early due to some irrational, anti-fundamentals dip.
Oh and don’t forget, UK is 6 hrs ish ahead, so I’m enjoying a breakfast of Myrons 12hr old brain cells while watching after-hours US trading and UK opening, while you are still dreaming of shiny metal hitting $10k oz 🙂
Natch, your assessment is yours alone. I consider the opportunity to share your musings as the privilege of being allowed to ‘look over your shoulder’…….NOT NOT NOT as direct instructions/advice as to what we should do with our money. ANY risk that others may take with their money by copying your moves, is theirs alone. But until we have earned our MBA stripes, the only sensible way to measure the results of our own DD/assessment, is to compare them against the professors’. Who knows, if there are apparent discrepancies, we may yet give you cause for reflection.
Received this tonight from Sara Nunally: Fission Uranium Corp. (TSX-V:FCU)
This morning, the company announced that it closed a private placement offering of 7.5 million subscription receipts at $1.50 apiece. That’s a total of $11.25 million in gross proceeds. This money will fund the company’s Patterson Lake South resource as it takes over 100% of the deposit in a deal with Alpha Minerals.
Each of these receipts is redeemable for one share of the company’s stock once the company moves out of escrow.
If folks are paying $1.50 for a chance to get into FCU in December, what price do they think FCU shares will trade for then? Investors are paying a 34% premium to current prices.
And here’s more fuel to the fire. The underwriters (a group led by Dundee Securities and including Macquarie Capital Markets) exercised their option to more than 1 million more shares at $1.50. That shows a lot of confidence in both FCU and the PLS resource.
At present 1.08…..Is that a Buy Myron?
You can’t “BUY Myron” even if you wanted too Alan, I am not for sale, HAR> HAR!
However, anytime you can buy shares UNDER what the big boy financiers are paying, you should have a pretty risk free investment all things being equal. Just my personal quirk, but when a stock has already had a considerable run up, in this case due to an “initial discovery”, I prefer to buy the stocks with nearby acreage that are selling for one quarter the price or thereabouts, that way a new discovery can quickly give you a double or triple. Of course there are no actual guarantee’s. on the other hand, neither is it guaranteed that an initial discovery will lead to an economically viable mine, or what financing cost to do so will do to the stock price getting diluted by further necessary financings.
For the record, if you review previous columns you will see that I mentioned numerous companies with huge acreages surrounding the Alpha/Fission discovery that have also had good exploration results, just not as advanced, but give them time. In alphabetical order, here are the companies with Patterson Lake South holdings.
Athabaska Nuclear, ASC-V(OWN), Azincourt Uranium, Lakeland Resources, (on buy list) Lucky Strike, Noca Resources NX-V (own) Skyharbour Resources (OWN) biggest and most advanced of the lot, but ASC/NX/Lucky Strike and Skyharbour have formed a consortium to reduce exploration expenses and a buy-in of 25% into any discovery on any of the 4 Co’s
properties, of which some are multiple. Those are the major players, but several more have recently bought property in the area and I am watching developments in the basin closely and will report on any news of interest. Read Sara regularly, she has had some good picks.
I hear you re nearby sites. But I don’t have enough knowledge to know how localised deposits are. Does mining history indicate that if you have a strike, other sites nearby will likely also have deposits ?
When you read terms like greenstone belt, district scale, or trend, then you are banking on the historical statistics that show the most likely place to find a NEW mine is NEAR an old mine.
Indeed with the primitive methods employed 50 – 100 years ago, many supposedly “mined out” sites are proving to be fertile ground for modern technology to discover new deposits that are extensions of previously mined areas and/or along trend with previously mined areas.
I at least did open tiny spec positions in both Globex and Eurasian as I am quite new to such lower value stocks… Just a first foray here.
Tread carefully, Megan, it is a perilous hobby as Myron wrote. I first heard of Avrupa when it was in the 30 cent range. I haven’t followed it closely enough to be specific, but I think the prospect generator model, in vogue nowadays, works better in theory than practice. Lara Exploration used to be a favorite of the newsletter community in this category. Altius is the only successful one that I can think off hand. While prospect generators don’t have the risks and expenses of an exploration play, they are still reliant on their partners obtaining the necessary funds. In addition the payoff for a successful project is halved. Granted they should have a better survival rate than most exploration companies during this down turn but I prefer to wait a bit longer and pick companies with good projects and good management. Lydian Gold presented a super buying opportunity this past week for instance.
My other quibble is the question of when to sell. Myron suggests that you find out the reason the price is falling before selling. Easier said than done. By the time the average retail investor finds out why, it’s too late. It’s even harder in the present horrendous market for juniors I find it best to be very watchful and suspicious.
I do find Myron’s comments to be most interesting.
There are some good cautions in lysanders post, the point being that stocks have an up and down cycle based mostly on TWO key considerations; 1) company progress measured by expenditures in comparison to drilling results relative to increase in reserves and 2) the general market sentiment regarding the sector, which may be the most crucial consideration.
This is where PATIENCE comes in, the fact that Avrupa is now nearly at 1/3 below the price lysander mentions, has to be evaluated in the context of the recent financing, AND the acquisition of additional property and progress in proving up more reserves, balanced against the current negative market sentiment. When the fundamentals of the Co. have improved, but market sentiment is negative, then the chances are very good that you are buying at a market low, and with PATIENCE, will make out like a bandit when the market sentiment turns, and/or further drill results change market sentiment.
LARA which I still hold, but had not mentioned, is a good example of a company of WHY patience is needed with juniors, I believe it will still pay off, and I also hold Altius, but in contrast, I sold my Lydian at somewhere around $2.19 (bought under a dollar) and YES I will buy it again when I am convinced the time is right, the point being the same stock can have more than one profitable run, and lysander may be right, need to take another look.
I just can’t profile ALL stocks in a 400 stock data base in a timely fashion, just enough that patient investors should do well. “Watchful and suspicious” is not a bad trait as long as it does not progress to complete cynicism leading to inertia (doing nothing) there is always opportunity for the contrarian and well informed investor. I choose NOT to follow the herd, particularly if I think they are heading for a cliff. Lysander’s “quibble” re sell points may have missed my premise of”checking fundamentals” as the first step to assess whether they have changed sufficiently to warrant selling, and if not, decide to ride out what may well prove to be TEMPORARY market sentiment, and only the individual can make that call based on personal risk tolerance. My position is simply stated, if there is nothing in the company fundamentals to warrant concern then long term potential for the company overrides “fear based or emotional market sentiment” that has nothing to do with the individual company.
Thanks for posting Megan, and that IS the way to do it, play it cautious with a small stake, and then add as results warrant.
Hi Myron,
I’ve been searching for some good penny stock profilers and an so impressed with the work you do. I can’t believe I thought about spending money on anything else. Stock gumshoe is definitely the best place to learn and hear great picks.
My question is, I think I found your personal website and saw you have top 12 core holdings. Do you recommend if I am just now investing to start with those or the ones you profile here? I know I should do my own research too but an very new to the game.
Thanks for all your writing and any help us appreciated.
You clearly think the crash is coming. Obviously bullion will be handy if $ bills become wallpaper. S how have Junior minders/gold fared during other crashes?