Ventana Gold (VEN.to): Master Blaster

Eike (for it is he)

Today's insider trades filings on Ventana Gold (VEN.to) are interesting and explain why VEN went through a moment of intraday weakness yesterday that saw the stock under $9. Here's the segment from Canadian Insider:

Ventana Gold Corp. (VEN)						As of December 10th, 2009
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
Dec 10/09	Dec 04/09	63X Master Fund	Direct Ownership	Common Shares	10 - Disposition in the public market	-1,000,000	$10.200
Dec 10/09	Oct 15/09	63X Master Fund	Direct Ownership	Common Shares	10 - Acquisition in the public market	2,155,300	$6.021
Dec 10/09	Oct 05/09	63X Master Fund	Direct Ownership	Common Shares	10 - Acquisition in the public market	4,875,300	$5.467
Dec 10/09	Aug 12/09	63X Master Fund	Direct Ownership	Common Shares	10 - Acquisition in the public market	1,814,200	$4.271
Dec 10/09	Jul 22/09	63X Master Fund	Direct Ownership	Common Shares	00 - Opening Balance-

The 63X Master Fund is the investment fund run by our pal and Brazilian squillionaire Eike Batista. What we see here is the 8.8m or so shares that Eike bought mostly (8.2m) back in July (and for some reason only registered in August/October) period have finally been filed (and by the looks of things he's not going to sweat over a CAD$1,000 late filing fee, is he?). But we also see that he's dumped a million of the shares in the last few days. The reason for this apparent vote of no confidence must be the legal action that's surfaced between VEN.to and local owners of the 'La Bodega' property, Sociedad Mineral La Bodega (SMLB) and its controllers, the Gelvez family of the Colombian region in question.

Not much doubt that it's a net negative to see Batista selling like this, however much you want to spin it as "wisely taking profits, still owns plenty" to feed some illusion or other. BUT, one thing that does strike me is that all of a suddenly sudden, Batista (via his 63X Master Fund) is suddenly keen on being transparent about his trades when previously he didn't give a damn about filing his inside position correctly. One guess here....and it is a pure guess...is that Eike wants to get a few nerves flowing through the marketplace about VEN.to stock. He'd actually like to see the price drop. If that's so, as he currently owns 7.8m or so VEN shares he's either shooting himself in the foot (virtually impossible) or he's looking to add at a lower price later.

OK, this could go down as an extrapolated conspiracy theory and Occam and his razor may well disagree with me here. Another thing to note is that the 1m share sale puts Eike under 10% owned and no longer an insider of record (i.e. he can do what he wants out of the public gaze) But Eike isn't one of the world's most successful investors by sheer chance, y'knowz.

So the bottom line is that this story has a long way to travel yet, but Eike has added a very short term negative to the mix with his sale. DYODD.

Ventana Gold (VEN.to) and the blueprint of a successful young miner

As mentioned yesterday, here's that post on Ventana Gold (VEN.to).

The recent move in VEN.to has been fast and strong, coming on the back of two or three interesting PRs that have added to its project area in Colombia, returned excellent drill results and added financing on good terms for current shareholders. Here's the chart I put together yesterday with annotations. Note that the price line goes off the chart a bit to the right as I've added this morning's price move to yesterday's chart.

Click to enlarge

So now compare what you see above to the theoretical, blueprint, not-gospel-but-right-idea chart below. This theoretical (see, I've said it again...that because there are no hard and fast rules here) gives an outline of what a successful miner's price chart often looks like over a five year period, as it moves from junior explorer to producer (and the Y-axis numbers are not representative, either...just an example):

Click to enlarge

You have an initial quiet period. Then comes a big move up when the market hears that "it's a live one" and the company has found itself a nice, prospective project. However at some point the initial enthusiasm wears off. Maybe due to a disappointing PR. Maybe because the company raises a ton of capital and dilutes too much. Maybe macro market conditions turn against it. There are dozens of possibilities but the result is the same, namely that the price goes down.

Then at some point in the life of this successful mining company a decision is made to move forward on the project. Financing is arranged and the whole thing starts to become a reality. This is often the point when long-term value seekers will take a position and hold it. As we move towards our theoretical year five, the mining project becomes a real mine and production starts. The share price increases along the way. The mine becomes a reality and the company matures into a producer. And they all lived happily ever after.

Now this is the most general of roadmaps and there are myriad alternatives, of course. Just as one example, it doesn't take into account any M&A activity. After all, a big miner could snap up our theoretical small miner at any point on this curve. However, Ventana Gold (VEN.to) is displaying all the hallmarks of that first "discovery period" share price jump right now; just don't ask me exactly where it is on the curve! Yesterday might have been the top, or there might be another dollar to add yet. I honestly don't know. Today's adjustment kinda points to a top, but the uptrend clearly isn't broken yet and there hasn't been any material news to change things fundamentally. Or in other words, DYODD, dude. Disclosure: I reco'd it at $0.67 but didn't buy myself (because I'm a pathetic whuss) and currently do not own.

Ventana Gold (VEN.to): How placements can be done to benefit all concerned

"If it looks like a duck....."

There were plenty of readers for this post yesterday entitled "The boyz are back in town" where I had a go at the greedy and self-serving way many Canadian junior mining companies raise capital, often urged on by 'The Houses' that freeload juicy finder's fees and options deals. All this is, of course, to the detriment of the people that they have a fiduciary duty to, i.e. the shareholders.

As is often the case, along with the spike in views for a particular post there came mailbag (always welcome from strangers when swearwords aren't included). And one mailer, initials GG, asked a good question, the key quote from which was:

".....all these companies need to raise capital so the alternative is what...?"

Yep, it's a good point. Everyone and anyone that buys a Canadian junior knows (or should know) that its working capital doesn't just grow on a tree and it will have to go to market from time to time to get the money it needs to add asset (and therefore shareholder) value. Until the company actually starts producing (or is sold) that's just the way it is.

My beef isn't against placements, bought deals, dilutive rounds of capital raising etc etc. My beef is the way it's done, and to illustrate the difference between the kind of insult shareholders of Colossus Minerals (CSI.to) had to suffer yesterday and the right way, here's another example from yesterday.

Ventana Gold (VEN.to) is a company I've already mentioned on the blog (in this post entitled 'Ventana Got Gold'), due to its recent and very interesting drill results published earlier this month. Yesterday it announced this placement to sell 6m units (each unit is one share at $0.56 and a warrant at $0.90) to raise $3.36m in working capital. As a bonus to the PR, the company also announced it had snagged a very experienced and well-regarded geologist as its new Veep of explorations for the Colombia property. Here's the chart of yesterday's action in VEN.to.

Click to enlarge

What we note here is that the dilution actually added share price value. It made the stock suddenly popular (check those volumes). In a little over an hour the stock moved up 20% and everybody is happy. The new guys on board, the already-in shareholders and the CFO.

Why is this so? Simply because VEN.to is being responsible. It's raising the modest amount of working capital that it needs via a placement that doesn't add massively to existing shares out (less than 10% in this case). Ventana is not adding an extra layer of fat to its coffers and screw ing the retailers the same way XRC.v or JAG or CSI.to has done (to name but three recent examples). VEN.to is thinking about all concerned, and it's notable that insiders at the company hold a significant percentage of those outstanding shares (over 30%) which means they're looking after their own pockets, too. Reader BF knows all about this part of the equation.

So kudos deserved by VEN.to, and we get a timely example of how placements can benefit all concerned, not just a bunch of lardasses sitting up there in Vancouver or Toronto. Ventana Gold just went up another notch in my personal estimation....certainly one to watch, people.

Finally, let's take a guess at the next gluttony dilution, and by the way Canaccord (Wendell Zerb David Pescod et al) has been pumping International Tower Hill (ITH.v) (along with the track record of its BoD), I'd say that one is high up on the list. DYODD, dude.

Ventana Got Gold

Ventana Gold Corp (VEN.to) is one of those stocks you kick yourself about. Two weeks ago I noted a big move on news it had secured more concession space at its main project that sits right next door to Greystar in NW Colombia. I had a look at its fundies and liked what I saw (prospective land, good mgmt team, low share count, tightly held stock etc etc). But being the whuss that I am hardly said a thing to anyone and then just watched it glide to 50c or so without buying or anything.

But today the irritation of not buying in those low 40s has just turned into outright "DOH!" material. Check out this PR released a few minutes ago that has these drill returns as part of the print:

--------------------------------------------------------------------
                                            INTERVAL            Au
DRILL HOLE NO.    FROM (metres)  TO (metres)   (metres) (grams/tonne)
--------------------------------------------------------------------
La Bodega Zone
--------------------------------------------------------------------
DDH-08-LB-070            60.65        80.00      19.35          2.32
and                     130.20       132.30       2.10         27.65
--------------------------------------------------------------------
DDH-08-LB-072            45.00        73.00      28.00          2.37
and                      94.00       155.00      61.00          3.16
--------------------------------------------------------------------
DDH-06-LB-074            60.00        79.25      19.25          2.88

--------------------------------------------------------------------
DDH-07-LB-076            36.00        61.00      25.00          1.82
and                      73.00        74.00       1.00         27.79
and                      81.25        94.00      12.75         34.62
--------------------------------------------------------------------
La Mascota Zone
--------------------------------------------------------------------
DDH-07-LB-073            85.40       100.00      14.60          7.46
and                     107.00       122.45      15.45          3.86
--------------------------------------------------------------------
DDH-06-LB-077            36.00        38.00       2.00         26.29
and                     133.00       154.00      21.00          6.20
--------------------------------------------------------------------
Las Mercedes Zone
--------------------------------------------------------------------
DDH-08-LB-068           116.00       154.00      38.00          2.41
and                     167.00       183.00      16.00          6.19
--------------------------------------------------------------------

Truly I say unto you, that's some good shit just returned. Now check out the intraday price chart, and take a wild guess as to the exact moment that PR was released.


There's a new Colombian gold play on the block and its ticker is VEN.to. Twelve metres of 1.1 ounce per tonne gold? This thing is going higher.