Thoughts from Myron—Emerging Markets, Precious Metals and Fiber Optics
by takeprofits | August 16, 2013 5:05 pm
MONITORING THE MARKETS FOR THE FIRST HALF OF AUGUST
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Source URL: https://www.stockgumshoe.com/2013/08/microblog-thoughts-from-myron-emerging-markets-precious-metals-and-fiber-optics/
Myron,
Looks like YAK has taken a hit as of late. The private placement offering closes soon – have investors taken the PPO at a premium with warrants rather than market price, causing demand to fall? Or is this a result of the money lost by management following the would-be takeover of another company as described in their MD&A?
I see, as of July 19, “The board of directors of MGG has authorized management of the Company to seek value creating alternatives to the ongoing ownership of Mandal”. They will get out of the insurance game.
What do you think of YAK now, at a significant discount, but perhaps a different company to when your above piece was written ?
Ryan
Will have to do some more research before I can address your specific points, but this type of thing is fairly common in small caps, any number of things can affect day to day pricing. I agree with Chris Mayer’s comment as per his latest update as follows from E-mail received to-day:
Quote: “Have a look at the U.S. dollar against the Mongolian tog in just the last 60 days.
That has taken a bite out of Mongolian Growth Group (MNGGF:otcbb). It is a surprise too, because the tog ought to get stronger as the demand for the local currency rises — as the giant Rio Tinto mine comes along at some point. But currencies are tricky and often misbehave. (I talked about Mongolia as my favorite emerging market for the long haul.) ”
COMMENT! If you bought it at a higher price then you have to make a decision whether to “average down” or just sit tight. Chris knows Kupperman personally and nobody else to my knowledge is providing a vehicle to tap into this rapidly emerging, or as some may prefer, “frontier market” so I personally think LONG TERM it is worth some speculative dollars.
The people on the ground in Mongolia personally have a lot of “skin in the game” and I believe they are competent and will make prudent investments that will pay off over the
long term based on their local contacts. Will keep everyone updated on what I discover that was not public knowledge at the time I wrote the piece.
This may be one of the riskiest speculations I have ever made, but never let it be said that I don’t put my money where my mouth is. I owned this stock many years ago and made money on it, but because of protests about their Rosa Montana gold project in Romania that required re-location of a whole village sparking local protests, I decided to sell to avoid “dead money” until the issue was resolved. I put the company that traded the last few year between just over a dollar to about $2.50 on a watch list looking for a re=entry point! I thought I had found it when a press release came out last week that the Romanian government had been “cut in” for an extra 7.5% without compensation bringing their total stake to 25% of a $10. Million oz. gold resource of which there are very few in the world. Draft legislation authorizing the construction of a mine has been presented to Parliament and this sparked the extremely well organized protesters to such feverish activity it even made the news on television here in Toronto.
This sent Gabriel Resources GBU-V to a low in the .60’s and my take is this is a GIFT, as I believe a “desperately in need of jobs” country like Romania where the government has a stake in a 10 Million oz. gold resource can not help but assist its development to create jobs in a very poor area, in spite of the vehement protests of a minority. I could be wrong and lose my entire investment if Gabriel is unable to survive any further delay in development of this project, but for me this is worth the risk given the tremendous upside as the price of gold rises on increasing demand from Asia.
You have just received a Trade Alert from CIBC Investor Services Inc.
Details: I am buying because I believe in the project long term and doubt that a minority of the population opposed to the development of this multi-billion dollar asset can be stopped at this stage, as far as nationalization, the Romanians NEED Canadian mining expertise to develop their resource, so I deem it a low risk possibility.
Action Bought
Quantity 400
Symbol GBU (***GABRIEL RESOURCES LIMITED)
Exchange TSE
Price $0.63
Thank you for using CIBC Investor Services Inc.
Let me be very clear, this is a highly speculative bet on an unknown future and you should not follow me into this stock UNLESS you have carefully weighed the risk factors and have capital you are willing to put at risk for a HUGE potential payoff IF things go well. A small stake will put you in a position to ADD once the situation clarifies itself further. Getting ob GBU’s mailing list is a must to monitor their stock.
Im up C$200 on GBU in one day and fully expect (hope for) another zero. Thanks for the pointer Myron
Good for you Alan, intelligent speculation can be profitable and I hope you add that zero.
While it may seem as if I deal in risky stocks, I am actually quite conservative and will be putting in a “stink bid SELL” of 100 shares @ .98 for the next week or so to take some of my money off the table in case the decline deepens. Rarely does a stock go straight up or straight down, but what this situation proves, as I have alleged several times since starting to write these columns, the market as a whole is IRRATIONAL and stock prices can swing to extremes on any unanticipated news announcement! I can see this particular stock having some wild swings as the situation with the Romanian government continues to play out so I will sell on 50% gains and buy back in on a 25% drop. This is the latest information I have.
“Gabriel Resources Ltd.: Rosia Montana – Reported Media Statements from Romanian Government
TORONTO, CANADA–(Marketwired – Sept. 9, 2013) – Gabriel Resources Ltd. (TSX:GBU) (“Gabriel” or the “Company”) notes media statements in Romania this morning reporting comments by the Prime Minister and other ministers of the Romanian Government (“Government”) that the draft legislation relating to the Rosia Montana Project (“Project”) is to be rejected before debate by the two chambers of the Romanian Parliament (“Parliament”).
Notwithstanding that the Government approved the draft legislation in its meeting on August 27, and recent polls illustrate a majority of support for progression of the Project across Romania it appears that the Government has instituted emergency procedures to halt any debate in Parliament.
Gabriel is urgently seeking confirmation of the actual statements made and clarification of the impact on the proposed permitting of the Project. If the draft legislation is rejected then the Company will assess all possible actions open to it, including the formal notification of its intentions to commence litigation for multiple breaches of international investment treaties.
As matters progress the Company will update the market accordingly, however until such further announcement the Company would advise caution in the trading of its shares.
About Gabriel
Gabriel is a Canadian TSX-listed resource company focused on permitting and developing its world-class Rosia Montana gold and silver project. The exploitation license for the Project, the largest undeveloped gold deposit in Europe, is held exclusively by Rosia Montana Gold Corporation, a Romanian company in which Gabriel owns an 80.69 percent equity interest, with the 19.31 percent balance held by CNCAF Minvest S.A., a Romanian state-owned mining enterprise. Gabriel and RMGC are committed to responsible mining and sustainable development in the communities in which they operate. The Project is anticipated to bring over US$24 billion (at US$1,200/oz gold) to Romania as potential direct and indirect contribution to GDP. The Project will generate thousands of employment opportunities. Gabriel intends to build a state-of-the-art mine using best available techniques and implementing the highest environmental standards whilst preserving local and national cultural heritage in Romania.
For more information please visit the Company’s website at http://www.gabrielresources.com.
Forward-looking Statements
This press release contains forward-looking information as defined in applicable securities laws relating to the Company and/or the Project (referred to herein as “forward-looking statements”) that are based on management’s current expectations, estimates and projections. Specifically, this press release contains forward-looking statements regarding the returns to Romania from the Project and in respect of future permitting processes. All statements other than statements of historical facts included herein, including without limitation, those incorporated by reference, those which may refer to the Company’s financial position, business strategy, plans, objectives of management for future operations (including development plans and objectives relating to the Company’s business) the economic impact, job creation, costs estimates, patrimony plans, future ability of the Company to finance the Project, Project delivery and estimates regarding the timing of completion of various aspects of the Project’s development or of future performance are forward-looking statements.
The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “projects”, “may”, “will”, “schedule”, “potential”, “proposed” and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that are inherently subject to significant business, economic, legislative, political and competitive uncertainties and contingencies.
Forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which are difficult, or may be beyond Gabriel’s ability, to predict or control and that may cause the actual outcomes, level of activity, financial results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, without limitation, changes in the worldwide price of precious metals; fluctuations in exchange rates; legislative, political or economic developments including changes to mining and other relevant legislation in Romania; geopolitical uncertainty, uncertain legal enforcement; changes in, and the effects of, the government policies affecting the Company’s operations; uncertainties related to timelines for awaited approvals; changes in general economic conditions, and the financial markets; operating or technical difficulties in connection with exploration, development or mining; environmental risks; the risks of diminishing quantities or grades of reserves; and the Company’s requirements for substantial additional funding.
Accordingly, readers should not place undue reliance on forward-looking statements. Gabriel undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law.
Gabriel Resources Ltd.
Jonathan Henry
President and Chief Executive Officer
Mobile: +44 7798 801783
jh@gabrielresources.com
Gabriel Resources Ltd.
Katie Fedorowicz
Investor Relations
Mobile: +44 7810 437059
katherine.fedorowicz@gabrielresources.com
Interesting how quickly things can change. I bought GBU Gabriel Resources @ .63, sold my first hundred @.98 to get some money off the table and then sold the remainder @.89 when the news came out that the legislation to allow development was defeated in parliament as I expected the stock to drop like a stone. So much for my timing, it has lately hung around $1.15 so I will have to take another look at determining what is moving the stock up after this parliamentary negative. There may be chances for another profitable entry point below a dollar, hopefully. Still think a deposit of that size will eventually get developed, but timing the entry is the key when logic and common sense carry no weight in a decision.
Turquoise Hill Resources (NYSE:TRQ), The company restated financial results for all of 2010-2012 and for part of 2013 late last week. This was because of an accounting change on how and when one of its subsidiaries recorded revenues for its coal production.
Turns out these changes showed a decrease in revenue for parts of this period. Shares fell on the news. And today, we’re getting the company’s earnings report.
Investors aren’t optimistic, and shares fell significantly.
Thanks Alan for the update. No question my timing on this one was not ideal, but thats the way the cookie crumbles, sometimes information available is incomplete and things are not as they seem. I still believe this is a good long term position but prudence says any purchase decision should be put on hold until the situation is clarified further. According to this press release that will probably not be until late Jan. at best. Depending on how much the market discounts the stock it might become a serious bargain under $5. or thereabouts.
http://online.wsj.com/article/PR-CO-20131114-908605.html?dsk=y
Hi Myron,
Can you help explain what is happening with TRQ and rights to commence.
Thanks
Ok,
I have been reading about splits. Any thoughts on the future here?
Thanks,
Brian
The situation is still not as clear as I might like. What the company is doing to the best of my understanding is trying to avoid shareholder dilution as much as possible while negotiations continue with the Mongolian government. They have issued a “rights offering” to existing shareholders giving them the “right” to buy an additional share @ $2.70 for everyone they already own. Exercising that right means people who bought at say $7.30 (price a few months ago) would average out around $5. which was my target buying price. For anyone who did buy around that price and then took part in the rights offering could be in for a profitable ride if prices advance as production ramps up and a settlement is reached with government.
Whatever happened to Rubicon minerals corp? It was a previous recommendation that fell from $.50 to .04.