Saturday, 22 February 2014

Brent Cook & John Kaiser Discuss Markets and Stock Picks

Al Korelin discussion with Cook & Kaiser and others
Interesting to see the different approach of the industry geo, Cook, looking for deposits that work at low metal prices, against the investor looking for leverage to a higher metal price, and the swing from being priced for bankruptcy to profit by Mymikan Capital's Dan Oliver.

Cook : 

  • Troubled by good and bad companies rebounding equally. 
  • Risks of companies still to be cleared out. Don't lose money. 9/10 times a dog property is a dog no matter what the metal price.
  • Rules of thumb / blind faith in assays articles
  • Take the time to review data on websites. Record of company management, honesty.
  • Companies - he owns
    • Roxgold - High grade Burkina Faso - PEA 47% IRR - results on adjacent project - feasibility study due. Low capex


  • Selective bull market. Deposits without requirement for higher metal prices rebounding (really?)
  • US recovery will be good for emerging markets - demand 
  • Choose wisely - will do very well in the resource sector
  • Companies
    • Zinc - 2.5m T supply loss due to mine closure, 1m T coming onstream. Limits to China supply growth. Likes Inzinc Mining (IZN) formerly Lithic resources in Utah, advanced zinc deposit, not many around. 2010 poor base case study, rework magnetite waste as saleable. 
  • Raising money at the right times. Mid Jan 600/700m bought deals. Funding strike over. Institutions looking to bottom and uptrend for deposits, want back in. Exploration not yet happened.
  • Privately understand targets to identify plausible potential value, work around forward looking statement controls.
Dan Oliver - Mymikan Capital
  • Markets doing contrary to everyone's expectations - gold best performing since taper - causing emerging markets problems
  • Companies which were priced for bankruptcy, which can't survive at $1,200 gold have bounced the most.
  • 2009 situation - gold going higher, bankruptcies off the table
  • Companies - 
    • Detour Gold (DGC.TO) - low grade high throughput. Need >$1200 - triple as move from bankrupt to survive
    • Cycling out of Detour - Looking for more Operational leverage to gold - companies which require higher price
  • Management are option/warrant owners. Leveraged to marginal properties. Pullback shown who can preserve capital structures. High cost investments which shouldn't have been made can become payable write back up.
Chris Temple
  • Investment houses were looking for value in high priced market and found it in the miners.
  • No major drivers of global growth 
  • Be very selective in resource selection - not so driven by China growth / build
  • Precious metals, energy, fertiliser foodstuffs
  • Companies
    • Adeco Agro (AGRO -US)- Large investor in farmland in South America.
  • Gold drivers from macro / fear
  • Companies 
    • Adamera Minerals (ADZ.v) - Yale Simpson - highly speculative. NE Washington nr Kinross Mill / mine

Cory Fleck

  • Companies 
    • Santa Cruz (SCZ.v)
    • Silvercrest (SVL.v)
  • Identify laggard companies which will not move forwards.

"Doc "

  • Companies
    • Great Panther
    • Pan American Silver
    • Silver Wheaton
    • Endeavour Silver
  • Jurisdiction, liquidity, management, buying value. Technicals for timing

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