Postcard from PDAC 2010, part four

Codename NRI sends in the last postcard from PDAC 2010 and seems to have been caught musing on previous portfolio errors (well, one specific error really) and that old saying 'what goes around comes around'. Before handing over, I'd just like to thank NRI for the postcards this year, a fine effort that gives insight to the PDAC bunfight (and will hopefully keep those IR depts on their toes the next time around, too).

Hi Otto,

This last day of PDAC, as I stood waiting for a departure shuttle from the Convention Centre, I noticed that the guy standing beside me was from Apollo Gold (APG.to). Having read last night the NR about the APG merger with Linear Gold (LRR.to) I exclaimed to him ‘Hey. You guys have been busy’. He was beaming; we sat together on the shuttle and gabbed about the deal until we reached our destination. I wished him well, expressed regret that I couldn’t share some celebratory champagne with him and conveyed the wish that we could meet up next PDAC for a belated clinking of glass.

My first question to the APG guy was ‘I don’t remember anything in the NR about Wade K. Dawe ( ceo/pres of LRR). What’s he gonna do?’ It was apparently agreed that Wade would be the Chairman of the Board, and the majority of the Board would be from APG. In the course of our commute, I did not hide from the congenial APG guy that I thought Wade was an excessively overcompensated, ineffectual executive. Ha! Notch another one up to the Peter Principle. Poor lad. How’s he gonna live on the pay cut? Or justify being paid at all when he’s under the scrutiny of competing interests? Coincidentally, I recalled viewing an APG presentation at PDAC last year and was not impressed with the metrics for this company transitioning into production. As I travelled today I’ve been thinking about what the APG guy told me and the challenges they faced. They were settling their development financing and everything blew up, then the forward-going financing deal they finally cut was quite oppressive. I know nothing more about APG. Maybe they warrant a look. I dunno.

LRR, on the other hand, is another in my portfolio which serves to remind me that my critical faculties and my bullshit detector need more work; since last fall I had been hoping for a share price recovery to the high 2’s and I would liquidate. I bought LRR in late 2007. I was influenced by the recommendation of Jean-Francois Tardif, an occasional BNN guest whom I respected. As I recall, LRR had cut a nice option deal with Kinross on a project in Chiapas, Mexico, had $100mill in cash and had a few other irons in the fire. I haven’t rechecked but at the time it might have been trading at a discount to cash.

Subsequently, LRR got badly outmanoeuvred by B2Gold on the Central Sun Mining takeout. Last summer I got thinking about the Kinross option, which LRR kept touting as prospective (a decision and a big balloon payment?); in the meantime I was already in kindergarten prep school for latam politics with my course material being IKN. So, I knew…yeah, right…never gonna happen. Then they picked up the Goldfields projects in Saskatchewan with one deposit in the final stages of mine engineering design and construction permit applications, with pre-production capex being about $63mill USD. In Jan09, they had a financing; in Mar09, they had a financing; in Nov09 they had yet another expletive provoking financing at a hurtful discount to market price.....with warrants. And you know, they still don’t have the mere $63mill and they were ditzing around with more drilling on this project which they had touted as good to go.

Lemme fill you in on my compensation beef:

I just rechecked the last Management Info Circular filed by LRR and in fiscal years 2007-09, our boy Wade took total compensation of $2.4million PLUS he is represented as being a Board member of publicly traded companies East Energy, Linear Metals (received $60,000 bonus), NWest Energy (received $17,500), Rhino Resources and UCore Uranium. Since that filing, he has added directorships with Immunovaccine Tech and Keeper Resources. This being a postcard and not a research project I have tired of pulling the filings to tote up his rewards.

Yup. Busy, busy Wade. Kinda hard to get a mine up and running and to get around to doing all the things you lead us to believe you’re gonna do. Wade K. Dawe should bone up on the implications of karma or, if that’s too hard, the golden rule.

Postcard from PDAC 2010, part three

Codename NRI (nondescript retail investor) has sent more goodies and here they are. As a quick aside, I reckon NRI and DRI has nailed Argentina in this one.

Otto, I wanna fill you in on a wonderful ‘stars n dogs’ story, which actually unfolded yesterday. Not long ago I stumbled onto Golden Predator Royalty & Development Corp (GPD.to) and after looking at their website and some filings, resolved to spend more time checking it out some day. William Sheriff, with some impressively heavy duty successes, is the CEO. Spotting the company booth I asked the young woman staffing it if Bill Sheriff would be giving a presentation, with the result that she gave me an invitation for a luncheon meeting. En route I met up with my buddy Distinguished Retail Investor (DRI) and invited him to come along. I should note that GPD.to has lots on the go, including some projects in the Yukon, which Bill Sheriff believes is a significant emerging district.

It turned out that the luncheon was an event hosted by the newly formed Yukon Gold Mining Alliance and the event was one where a number of member companies working in the Yukon would present – Alexco, Capstone, GPD.to,Western Copper, Northern Freegold, etc. Entering the room set up for dining, we immediately had access to beer or wine and seating of our choice. Serendipitously, Bill Sheriff took a seat beside us and we had his private audience. (Aside: I am even more interested in GPD.v and will consider further when I get home, but this tale is really not about GPD.v) Luncheon was served – salad , entrée and dessert - and it was truly exceptional. Then the speeches; the Alliance guy, the minister of mining and an economic development guy, all briefly pitched the mining friendly jurisdiction and the perks therein, financial and legislative (notably, one tier/no federal red tape, processing time lines, requiring gov’t to process within time limits, First Nations communities are all on side).

I gotta say that this was all new to me and I was as impressed with the set up as I was with the luncheon. Then the companies presented, about 5- 10 minutes each, and every company rep. enthused about the supportive government. My fave: Capstone encountered a glitch – some legal constraint – and prevailed upon whomever and the Yukon government passed remedial legistration within 10 DAYS so that Capstone carried on happily. DRI and I left the event agog and absolutely impressed.

Cut to Monday evening: While I was taste testing a pisco sour at Fortuna Silver’s reception DRI met up with me. He had just come from a formal reception hosted by Argentina government reps. He filled me in about the interminable government speeches which had been going on forever with no hospitality...on and on and on. He slipped out, returned and they were still going. DRI and I we split a gut laughing. His text to me later:

“...wherein attendees were packed into rows of chairs facing a dais, and subjected to one and a half hours of long-winded speeches from several levels of official and corporate spokesmen.. Bartenders were embargoed from offering drinks (at cocktail time) until the last speech was over. The (unintended?) message was: Formality and bureaucracy are alive and well down here. Major new projects have taken YEARS to permit, and negotiations over them never really end. But we promise that we are determined to increase the amount of investment we attract and exports of minerals from our country. We have no clue that we are a caricature of ourselves.”

A quick comment about today: I took in some very good presentations, one of which was by Jorge Ganoza for Fortuna Silver, another by the folks from AuEx Resources (XAU.to) and I visited some explorationists’ booths, including Firestone Ventures (FV.v), exploring for zinc in Guatemala. I dropped in at the McEwen Capital reception and surveying the huge and jam packed crowd, I immediately reclaimed my coat and called it a night…too tired to commingle. Last day tomorrow…

Postcard from PDAC 2010, part two

NRI is back with a second postcard from this year's PDAC bunfight, so without further ado I'll hand you over.

Otto,

Man oh man hard to decide what to write about, but leaning towards Vena Resources (VEM.to), whose reception I enjoyed Monday evening. Last year I wrote about meeting CEO Juan Vegarra and how much he impressed me, so meeting him tonight (that smart guy had put two’n’ two together) he asked me whether I intended to write him up again. I responded ‘gawd man, I raved about you; how could you object?’ He asked if I had ever had a pisco sour. ‘No’, said I; and wanting one (a great chaser to the two Corona beer I’d had), he fetched me one. Zowee! Disclosure: I do own shares…projects in Peru…this small cap company has jv’s with Cameco, Glencore and Gold Fields; but truth be told VEM.to is working capital challenged.

Arriving at the reception, I first encountered a knot of Cameco badged persons, a couple of geologists and others, and communicated my appreciation for their affirmation of my stock picking. Later, I was chatting with Juan Vegarra and these two guys approached; a tall guy with an Amerigo Resources (arg.to) name tag and another guy, with name tag flipped, who greeted JV with what I thought might be a German accent. He said something like ‘are you still surviving?’. I interjected. Pointing at his flipped name tag I asked, ‘What’s your name?’ He revealed it and I said, ‘Ah yes, I was going to ask if your name was Klaus. Let me ask you; are YOU surviving?’

Here’s the scoop readers. We'd been joined by Klaus Zeitler, Pres. of ARG.to, the share price of which got absolutely decimated during the copper price crash. ARG.to also had dire working capital challenges and was, imo, saved thanks to the very dilutive financial equivalent of mouth to mouth resuscitation by Ross Beaty. I know this because I own shares of ARG.to and I was avidly spectating the massacre. Anyway, the happily unfolding aftermath is that ARG.to is recovering nicely (the business, not so much the share price) and really looks to me to be back on track. ARG.to has investment shareholdings also of Candente Copper and Los Andes Copper which are juicing the financials with their respective share price recoveries.

Back to Klaus. Forgiving him for his unwarranted jibe from his glass house when ARG.to itself was survival challenged, I believe him to be a pretty smart guy. And, in the course of our gabbing he told me that he too is a shareholder of VEM.to. Ah…affirmation again of my stock pick. Smart guy Klaus is also a shareholder of VEM.to.

I moved along to the Fortuna Silver, Radius Gold, etc. reception. I would have lingered for a presentation but this was a party set up with great food, booze, music, dance floor and hostesses. So with energy waning, I ‘bucked up’ to imbibe another pisco sour (Juan Vegarra’s was better) and trundled off home to revive for day three.

So many stories, so little time…

Postcard from PDAC, 2010

Last year, reader Codename NRI (Nondescript Retail Investor) sent over some postcards with observations from the PDAC show in Toronto. The good news is that PDAC 2010 looks set for the same welcome deliveries and here's the first, as received by this humble scribe mere minutes ago.

Hey, hey, Otto. Nondescript Retail Investor (NRI) here in Toronto at Peedac and feeling some wear and tear the morning after the couple of receptions I visited after the presentations and booths were shuttered. A few highlights and low lifes:

Background: 2 years ago at Peedac when I was more dumb and gullible I believed the pitch of the slicks at explorationist Orko Silver (that OK.v would be taken out imminently by its JV partner, Pan American Silver) and shortly afterwards I bought shares at around $1.80 for a quick flip.

Spotting the OK booth and the guy there sitting in his couch and doing nothing, I sat down beside him and asked him when the OK exit strategy would manifest as I bought shares nearly 2 years ago and I was under water and I really would like this PAAS takeout to come to pass. This very glib guy told me that timing was PAAS call; and then exclaimed in dismay ‘you could have done very well; you didn’t buy at the top of the market, did you? Why didn’t you buy at 28c?’ (sidebar: the level the share price dropped to in late 2008) And then this he proceeded with his ‘all your own fault’ (conceded) ministration to lecture me on the old adage ‘ if you like a stock at $1.00, you should like it better at 70c’ ( yeah well, and if I believed a story at $1.80 and the price tag then gets discounted to 28c and the promised land is no where to be seen, I really am feeling that I’ve been conned and that my critical faculties need work. The OK guy should have been speaking in the Investors Forum

Yesterday a whole day of speakers, identified as letterwriters and analysts: Mickey Fulp, John Doody, Jay Taylor, Bob Moriarty, John Kaiser, David Coffin, Greg McCoach, Brent Cook. There were more, concluding with Rick Rule, a portion of whose presentation I listened to – and yes indeedy, Rick Rule did offer the adage that before you buy a stock for $1, you really should ask yourself if you’re going to like it better such that you’ll buy more at 70c). Returning to the couch at the OK booth… the glib guy offered me solace : PAAS was working on a feasibility study which would be finished in about 6 months and then it would happen… ‘hold on to your shares; you’ll get about five bucks’ . ‘But, but, but,’ said I , ‘doesn’t PAAS have a lot on its development plate with the Aquiline takeout?’ ‘Ah grasshopper, they’ll give you shares and that’s good; that’ll be no problem; PAAS shares are very liquid.’ ‘But, but, but, just because they release a feasibility study in 6 months (maybe) doesn’t mean that a takeout will immediately follow!’ ‘Grasshopper, they HAVE to make a production decision!’ Yup. I got it now and I’m feeling very mollified. So happy to be here at Peedac for these therapeutic encounters.

I went to Brent Cook’s presentation because I am all ears for what he has to say; and he started with a little intro identifying what he looks for with his last bullet being an exit strategy. He then invited Q’s which was an interesting succession of ‘waddaya think of this stock? waddaya think of that stock’. Stepping up to the mike, I noted that he had once admitted owning MAG Silver and reco’d it, so I asked him whether he still owned MAG.to and whether he thought they had an exit strategy which would materialize. Brent Cook said he still owns, that he believes the share NAV to be at least $15 and that sooner or later, be it two months or two years, Penoles will HAVE to take out MAG.to. Interesting… another fly in the ointment, best made plans of mice and men story unfolding or to be endured.

Observation : Rick Rule is a very captivating speaker. After his 20 minute presentation which was the last of the day, there was a scrum with about 50 people crowding around him and Rick Rule held court for at least an hour and a half.

I went to the silver reception at the Royal York organized by CPM on behalf of Silver Wheaton, Fortuna Silver, Endeavour Silver, Orko Silver (hopefully the beer I drank was charged to them), Great Panther and others. It was a very crowded affair which I attended last year as well It just occurred to me; ECU Silver (ECU.to) was one of the silver hosts last year and they were NOT last night. Huh! Checking the directory now I see that they do not even have a booth here at Peedac this year. Well, well, well…money must be really really really tight and credit cards are all max’ed out. Then again, maybe they’re all burning the midnight oil back in Velardena as they attempt to put the finishing touches on the fabrication of dore bar number 7 for the quarter.

More later, with much to tell …gotta go do day 2.

Final word: IR people manning booths at PDAC today, make sure you look after the rank and file when they come and visit you and not just the mining great'n'good. Cos one of them out there is NRI.

Postcard from PDAC: An addition to yesterday

NRI must have had a good night's sleep, as our superspy just remembered something else that went on over at the Petaquilla stand and wanted to add to yesterday's missive. Looks like Goldex is looking to sell its El Pato property in Guatemala and is not being very subtle about it, either. Here's NRI:

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Darn it, Otto, there's something important I meant to include in my report of my interrogation of Pet.rep, the CFO of Petaquilla Minerals...allow me:

Our discussion did not have a natural conclusion with our parting being preceded by a courteous adieu and a handshake. What happened was this guy in a suit with an exhibitor's name tag which said GOLDEX rushed up, butted in on my tete a tete with Pet.rep. and said to Pet.rep. : Want to buy a gold project in Guatemala? And Pet.rep. responded: Yes. We'll talk.

Otto, my point is not to draw attention to what a rude little prick the guy in a suit with a GOLDEX name tag was but to tell you how it shocked and amazed me that this Master of the Universe should be so indiscreet and careless about letting me in on his wheeling and dealing. I mean we are not talking about their dealing baseball cards or dope. Imagine if I were chatting with Yamana's Peter Marrone. What do you think the chances are that Tye Burt might rush up, interrupt, and say: Hey Peter. Wanna buy a gold project in Russia? Only a Kupolla million...

Isn't there some rule about a level playing field? Well, I intend to watch the share price action of PTQ.to and Goldex Resources - GDX.v - and if it develops that I could have made a profitable trade on this inside information to which I, but not all members of the public, was privy, I will send a postcard to the OSC as well.

Gotta go. No time here to tell you about my meeting Vena's Juan Vegarra the other night...just as well...my heart's still pounding.

later,

NRI

Postcard from PDAC: Low lies and high fives

Superspy "Codename NRI" is back with a second missive, direct from the heaving bosom of PDAC. If you missed the first, here it is. So here we go with the second NRI view of things. Enjoy (because I did...in fact it's a hoot).

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NRI here, with a few tales to tell...

I thought I should act on the suggestions of Otto, the incisive analyst, and locate a few of his interesting miners. I spotted the Petaquilla Minerals booth; and got straight to the point:

NRI: Aren't you the guys that have an unpaid fine?

Pet. rep: No. We don't owe a fine.
NRI: What do you mean?

Pet.rep. (defensively): They don''t have the authority to impose a fine.

NRI: Who?
Pet.rep.: The environment group. Only the Ministry. Nothing is being enforced against us.

NRI: Are you saying that the Ministry hasn't imposed a fine?
Pet.rep. : Not that I'm aware of.

NRI: Who are you?
Pet.rep.: Bassam Moubarak, the CFO.

NRI: The CFO...so, if a fine were imposed, you would know.
Pet.rep. : I'm not aware of any fine. A misconception in the media.

NRI: Which media?

Pet rep. responded but I didn't catch the reference. It sounded like a Panamanian newspaper.

This ended our exchange and I hurried off to a bench to sit and make a transcript of the questions and answers, while the exact words (as I recalled them) were fresh in my mind.

Now, Otto, if you find out that my interview might be of any help to Panamanian authorities I am responsive to providing evidence and would be delighted to have an expense paid trip to Panama for that purpose.

Digressing, I paid a visit to the booth of Eastmain Resources - ER.to - explorationists with some great projects in the James Bay area of Quebec, Canada, one of which is a JV with Goldcorp, which is developing the Roberto Mine on an adjacent property. ER is one of my favourites (I have shares) and I like their people a lot. I talked to one of the geologists, Cathy B, and she told me this PDAC has been very busy for them. I asked Cathy whether she and husband Don (ER's CEO) exhibited at the show in Phoenix last week. Cathy told me they had and, though they expected that it might be quiet, it was very very busy. Cathy told me that a coin dealer was set up right behind them; and he sold out his entire inventory - $173,000 in coins - in the first three hours of the show.

Returning to Otto's crib sheet, I really wanted to find Rob McEwen. Well my buddy, JG, informed me that the

McEwen companies - Rubicon Minerals, U.S.Gold, Lexam, Mineras Andes - were hosting a reception Tues eve at 1King St - a tony location in the power vortex of Toronto. Off I went - to this, my fourth reception so far, with the first three having been in suites in the Fairmont Royal York and the Intercontinental Hotel. Digressing again, the other night at the Royal York, a staff person told me that the PDAC is their biggest and busiest engagement of the year - and the one during which the most booze is served. Many many receptions are hosted simultaneously in each of several hotels. The McEwen reception was not in a suite - but in a ballroom! - and it was packed. I was given 2 bar tickets upon entry. Waitstaff circulated with platters of hors d'ouvres; rep's from each of the McEwen companies had stations to receive and respond to questions; and a photographer had a station to take one's photo as one held a 400oz. gold bar.

My buddy JG arrived and we connected. He told me that McEwen must be economizing, because last year, the bar was open - no 2 drink limitation - and there was a lot more food. I hadn't sighted Rob McEwen in the packed ballroom but JG had and pointed him out. I approached Mr. McEwen and waited for the couple who were chatting with him to finish; and then, responded to his greeting by thanking him for hosting this reception. I told him I had been following the Minera Andes story and was really glad that he had jammed Hochschild. Mr. McEwen responded that they deserved to be jammed. I asked whether he had heard about Inca Kola News; He had not. I told him this guy Otto had this blog and encouraged anyone spotting McEwen to highfive. Gawd love him, Mr McEwen immediately responded with the highfive. Anybody reading this: he is such an accessible guy. I have had an opportunity to speak with him before and my buddy JG told me that he once called one of the McEwen companies; and Rob McEwen answered the phone and was absolutely responsive to the questions which JG posited.

Wearing down here, I wanted to report on my meeting the charismatic and very impressive Juan Vegarra, the CEO of Vena Resources, and the question I didn't get to ask him; but I must sign off.

more later...
NRI

Related Post
Postcard from PDAC: Where have all the people (and freebies) gone?

Postcard from PDAC: Where have all the people (and freebies) gone?

Codename NRI is the brand new IncaKolaNews Canada correspondent (ok ok...it's a friend at the show). Anyway, NRI sent this dispatch with some impressions of PDAC day one (Sunday). Hope you enjoy:

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Nondescript Retail Investor (NRI) corresponding from the PDAC (Prospectors & Developers Assoc of Canada) conference in Toronto, Ontario...

General impressions from yesterday, Sunday, the first day: Compared to last year which was like a moshpit, the turn out Sunday was noticeably sparser. So, the setting is a big convention centre next to the Rogers Centre (home of the Toronto Blue Jays) and a longer walk than many attendees would venture from the downtown hotels at which they're staying. Hence, there are free shuttles every 10 minutes during peak times from 4 or 5 of the major hotels. Riding in from the Sheraton Four Seasons Hotel at about noon yesterday (not a peak time - a half hour's worth of ride), there were only 5 of us on this big bus; riding away at about 5pm (peak time) to the Delta Chelsea there were, I believe, 8 of us on the big bus. One guy, an exhibitor, told me that exhibitor registrations were down 25% from last year; another guy told me that that there were also many registrants who didn't show up.

The convention floor for the Investors' Exchange - my territory - is maybe the size of a football field; as an NRI I have free access to this territory as I have been issued a large blue bordered name tag which distinguishes me from an Exhibitor or a Trade Show participant. Adjacent to the Investors' Exchange is another large area - maybe another football field size area? - which is the site of the Trade Show - government types and professional services to the mining business people and equipment vendors , etc - to which I do not have access, as the special name tag facilitating admission to that space costs more hundreds of dollars than I wish to spend and also I have no interest in buying a man portable drill or speaking with a representative of the Ministry of Mines in, say, Sierra Leone. Last year, I did manage to sneak past a guard - who, by prior arrangement, was looking the other way - to get into the Trade space in order to speak with a geologist with the Mexican government; so, I do have a sense about what's on the other side.

Anyway, back to the turnout - and the Investors' Exchange - no exaggeration...I believe the Exhibitors and their entourage easily outnumbered the Exhibitees with their blue bordered name tags and black cloth satchels for stashing promo material, etc. And, predominantly, the Exhibitors were clustered together chatting with each other with no captive Exhibitees to whom to promote.

And many booths were unmanned/unwomanned. For example, I passed the Dia Bras Exploration booth; but was unable to posit Otto's suggested question about whether they had financing as there was no one there. And I went to another exhibitor, the CEO of which I wished to speak with, three times; and no one was ever there.

Another observation: No freebies. Last year, everybody had complimentary pens and notepads and drink holders and raffle tickets and gold foil covered chocolates and stacks of Interra maps and encyclopedic compendiums of analysts reports and satchels and water bottles and on and on...this year, I was hard pressed to get a free pen. And no kidding, I believe there is even a dearth of paper promotional material of the companies themselves - so all these white clothed display tables are considerably more barren. As I talked to an IR person of one explorer company I reached to pick an foldered investor's package; and the IR guy intervened and offered to email it to me.