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XMFSinchiruna (26.77)

June 2011



Lifting Gold's Veil of Secrecy

June 29, 2011 – Comments (28)

While many still cling to the fully disproven notion that gold has lost its relevance within our modern financial world, the pattern of secrecy and mysterious dealings that characterizes the global gold market makes it clear: gold still matters to some very powerful entities.   [more]



Valuation Alert: Gold Miners Tumble Deep into the Bargain Basement

June 27, 2011 – Comments (11)

I have rigidly turned my back to employing price-to-earnings ratios as a tool for assessing share valuations in the mining sector over the years, and I believe I've had good reason. You see, the need to appropriately account for the value of a miner's underground reserves and resources causes P/E ratios within the sector to often appear quite elevated in relation to stocks from other sectors, resulting in what I have felt was an unnecessary psychological barrier that obscured value propositions for the less experienced resource investor. Of course, I pay very close attention to earnings and cash flow, but for valuation purposes I am far more interested in the longer-term perspective gleaned by comparing the value assigned to identified underground resources.

Newcomers to the resource sector may wish to imagine what might happen to their favorite industrial stock if all the materials required to produce their product were buried underground adjacent to the production line. If Ford Motor were to fortuitously discover 1 billion completed chassis of vintage Mustangs buried beneath its Detroit facility, and all the company had to do was to excavate them, drop in some engines, and pop on some tires, you can bet we'd see a major pop in the shares. Because that underground inventory would contribute to revenue over time, auto investors would also have to adjust their notions of an appropriate P/E ratio for the stock to account for the value of that inventory. Gold and silver royalty stocks form another peculiar subset of the group, and CAPS member speedybure recently offered some creative alternative valuation techniques for Silver Wheaton (NYSE: SLW  ) and Sandstorm Gold.  [more]




June 23, 2011 – Comments (2)

Year after year, this well-run miner continues to execute beautifully on strategic growth and enhance shareholder value. Everything I see in the works portends a continuation of that trend.  [more]



Why I Doubled Down on Brigus Gold

June 17, 2011 – Comments (35)

I know I just posted another blog post a short time ago, but I am way too excited about this account of my visit to Brigus Gold's Black Fox Mine to wait any longer before sharing it with my Foolish community! :)  [more]



Compelling PM MicroCaps Series, Volume V: Tyhee Gold

June 02, 2011 – Comments (51)

With my apologies for an extended delay between the Barkerville post and this one, the time has come for this community to put its collective head together, play devil's advocate, and dive beneath the surface for any reasonable explanation for the paltry $40 market capitalization that the market has assessed to Tyhee Gold (TYHJF on the pink sheets). I have not identified one, and I personally consider the stock one of the premier examples of a deep and persistent market disconnect from anything approaching a reasonable valuation for an expanding in-ground precious-metal resource. In that respect, it reminds me of Alexandria Minerals, and perhaps it is no accident that Alexandria and Tyhee both rank among my top-five equity holdings overall.   [more]

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