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goldminingXpert (29.54)

Mediocre Panther (GPL) fesses up

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August 12, 2011 – Comments (42) | RELATED TICKERS: GPL , ECUXF.PK.DL , GORO.DL2

Apparently their cash costs aren't $8/oz after all. A turn toward honest accounting sends the stock down 10% today and more to come. For background, see the inital expose of their flaky accounting and today's update. Be very careful with any of these junior silver companies that are trying to pump their stocks up on the back of the great silver boom. As Mark Twain allegedly said: "“A mine is a hole in the ground with a liar at the top.”

ECU Silver and Gold Resource are two other significant silver producers with dubious accounting to watch out for. 

42 Comments – Post Your Own

#1) On August 12, 2011 at 3:15 PM, goldminingXpert (29.54) wrote:

Disclosure: I'm a subscriber to Otto's newsletter and think he's a swell guy. His rhetoric is a bit over the top at times, but he is by far the best analyst of latin american miners out there. If you follow the space, cough up the $40/month and get his 30-page weekly newsletter.

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#2) On August 12, 2011 at 3:16 PM, motleyanimal (91.35) wrote:

I wondered if the decline at Crocodile was fallout from this. At least Crocodile is honest about their production costs which are rather high.

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#3) On August 12, 2011 at 3:28 PM, XMFSinchiruna (27.88) wrote:

I think the community knows exactly how much weight to give your opinion on Great Panther.

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#4) On August 12, 2011 at 3:34 PM, goldminingXpert (29.54) wrote:

Seeing as how I have never thumbed Great Panther, I don't really have a track record on the company so I'm not sure why the community would.

I posted a link to Otto's criticism of your GPL article earlier this year, which you never answered. Seeing his criticism play out as he projected, I felt like sharing that fact with the community.

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#5) On August 12, 2011 at 3:37 PM, XMFSinchiruna (27.88) wrote:

I never say your earlier post, perhaps because I think very little of your ability to evaluate mining stocks.

And here again, if you feel strongly about GPL, let's see you short it with conviction and hold the position open for a couple of years. Go for it ... I dare you!!

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#6) On August 12, 2011 at 3:42 PM, goldminingXpert (29.54) wrote:

I didn't post earlier. I left a comment on your article. http://www.fool.com/investing/general/2011/04/14/your-sneak-preview-of-the-next-silver-bonanza.aspx I was expecting you might try to explain how Otto was wrong. It appears Otto was right, in fact, and that GPL's management mislead all of us in the investing community.

Seeing as how you, like me, do not take kindly to management misleading investors, I would expect that you would have some concerns about GPL's accounting (and heavy insider sales, hiring stock pumpers convicted by the SEC to tout the stock, etc.) 

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#7) On August 12, 2011 at 3:46 PM, goldminingXpert (29.54) wrote:

misled*

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#8) On August 12, 2011 at 4:45 PM, XMFSinchiruna (27.88) wrote:

hahahaha....

I just clicked to the link to your man Otto's hit-piece. I'll laugh his analysis all the way to the bank with my 375% realized gain on a massive stake in Great Panther started between $0.60 and $0.80 per share.

And I'll keep laughing at Otto when I eventually cash out the remainder of my stake for a gain of 800% to 1,000%.

I've been called all sorts of crap by all manner of hacks before. It generally hasn't turned out very well for the offender in the long run. This guy's tirade against me for my coverage of Hecla's litigation settlement used similarly offensive tactics of personal attack and ridicule, and things did not end well for him:

http://truthingold.blogspot.com/2011/02/dont-be-fooled-by-motely-fool.html

Your man Otto displays a true lack of professionalism with his spurious character assassination, attacking me on a personal level with statements like "The Motley Dumb#@!". He shows himself to be an individual of questionable character.

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#9) On August 12, 2011 at 4:51 PM, goldminingXpert (29.54) wrote:

He discovered accounting shenangians which the company fessed up to today, and your response to tout your gains and deny any responsibility for misleading readers? Classic pump & dump tactics there. I'm not calling you a pump & dumper, but it is a bit alarming how cavalierly you blow off the fact that your top silver pick is running an accounting scheme that they slipped by right under your nose.

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#10) On August 12, 2011 at 4:53 PM, goldminingXpert (29.54) wrote:

P.S. You are right about Hecla by the way. Serious issues with that company.

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#11) On August 12, 2011 at 5:01 PM, TheDumbMoney (38.47) wrote:

Ladies.  Ladies.  Can someone please get me some iodine for the collateral claw marks?

(There, you can both attack a nobody now.)

1)  Seems Mr. Barker was dead-on about Hecla,

2)  Seems like he missed something at GPL,

3)  But even by the revised numbers GPL seems pretty profitable, at least with silver trading at similar-to-current prices.

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#12) On August 12, 2011 at 5:07 PM, XMFSinchiruna (27.88) wrote:

Take a hike, GMX ... you have zero class.

If you wanted to discuss the company openly in a respectful format, there was a way to make that happen. But you go slinging someone's personal attacks at me, and then suggest that I "misled" my readers and accusing me of "pump and dump" tactics, then you're going to get nothing from me excepy yet another reiteration of how little regard I have for your opinions.

I will delve into GPL's results, speak to Rob Archer, and report to my community of readers in my own forum. If there was a problem I missed with the company's accounting, I'll take ownership for that. Because I have not had a chance to review their Q2 results, and given your track record of leveling spurious allegations backed by either absent or highly questionable supporting information, I withhold comment on the allegations you are making here until I have had a chance to assess the situation thoroughly.

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#13) On August 12, 2011 at 5:08 PM, goldminingXpert (29.54) wrote:

@comment #11

1) Yes.

2) Yes.

3) Kind of. But management has 3 strikes now. They hired a dude, a criminal with an SEC record, to pump their stock. Two, insiders sold tons of stock (one director sold all shares entirely) at inflated prices while Three, the company was undercounting its cost of production through dubious accounting. Now that management has sold out of its positions, it goes back to using normal accounting and the stock tanks. 

You want to invest in that management team? 

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#14) On August 12, 2011 at 9:09 PM, dragonLZ (99.43) wrote:

GMX, what in the world did you do to go from this:

#21) On September 23, 2009 at 10:21 PM, TMFSinchiruna (99.44) wrote:And by the way ... all this nasty vitriole against GMX is unwarranted un-CAPS-like. He deserves your respect as a champion CAPS player, a long-time constructive member of this community, and as time has worn on a more zen-like participant in the capital markets. I too do not always agree with him, which is what makes CAPS great, but I respect and admire him as a person and as a keen intellect.

Hope to see more of you around here GMX!

 

to this:

 

#12) On August 12, 2011 at 5:07 PM, TMFSinchiruna (99.44) wrote:

Take a hike, GMX ... you have zero class.

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#15) On August 12, 2011 at 9:58 PM, golddlog (< 20) wrote:

GMX, have some self respect, your baseless hyperbole is doing more harm than good for investors.   The investing game is hard enough without your bad advise fogging up the mirror.  Your commentary has become a joke for fools and your opinions in the mining sector serve as a confirmation to do the opposite in terms of investment strategy.  Sorry for the harsh criticism, but you are a menace to serious minded investors.  do us all a favor and please stop your posts regarding gold and silver mining companies.  The only thing of value is the response from TMFSinchiruna and his ensuing fact based destruction of your baseless assertions.  In that regard your ok.   

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#16) On August 12, 2011 at 10:35 PM, goldminingXpert (29.54) wrote:

Dragon: TMFSinch and I have a love-hate relationship at times. I think he is in a more hating mood at the moment.

Golddlog: I am a menace eh? I would think the real menace would be Golden Panther management who deceived you about their cash costs, sold out their shares at inflated prices, and then fessed up today, sending the stock tanking. That seems more menacing than me noting their dirty deeds. But what do I know? I am just a cynical analyst who dislikes sleazy management and stock promotions.

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#17) On August 13, 2011 at 12:21 AM, HarryCarysGhost (99.71) wrote:

Good post GMX, I owned this puppy for a while but took my profits awhile ago.

Sinch, with all due respect you do seem a bit defensive, GMX did'nt write the OTTO post's, just put the links out there. So I did'nt read it as him attacking you at all.

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#18) On August 13, 2011 at 12:57 AM, goldminingXpert (29.54) wrote:

I repeat that I do not endorse the language Otto uses. That said, he is the best latin american mining analyst out there -- check out his analysis of the Peruvian election for example -- he was weeks ahead of the curve, and his buy and sell calls on Rio Alto, Bear Creek and other Peruvian stocks was DEAD ON. He has a blunt way of communicating his profound wisdom which can be abrasive at times. All that said, he called the accounting shenangians at Great Panther months ago, and they played out like he predicted today.

Hopefully Chris will talk to GPL management like he said he will in comment twelve, and if they are unable to vindicate themselves, hopefully he will be honest enough to admit that he got tricked by them. I was fooled to a degree by the management at Jaguar Mining -- there is no shame in making mistakes, the problem is when we try to make excuses or deny we made errors.

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#19) On August 13, 2011 at 11:19 AM, SN3165 (< 20) wrote:

Did anybody actually read this?

"...it is unfortunate that the delays in shipments of concentrate from our Guanajuato operation have impacted our revenue in the second quarter. However, we believe that the agreements we now have in place to secure future sales will remedy the situation and that the backlog of concentrate will be sold over the balance of the year at potentially higher metal prices." 

I'm not even considering selling shares....though, I do want an explanation for this: 54% increase in cash cost per silver ounce, net of by-products, for the second quarter of 2011 to US$11.84 from US$7.70 for the second quarter of 2010."

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#20) On August 13, 2011 at 11:29 AM, goldminingXpert (29.54) wrote:

At comment nineteen, yes, GPL was understating the cash cost of production before by oddly leaving out costs such as depreciation and amortization. The posts I link in the blog post explain the accounting that caused this swing.

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#21) On August 13, 2011 at 2:27 PM, HarryCarysGhost (99.71) wrote:

I remember having this conversation earlier-

pastordisaster (< 20) Submitted: 6/7/2011 12:39:28 PM : Start Price: $2.66 GPL Score: -23.90

The notorious stock pumper, Jonathan Lebed, was paid $20,000 to pump this stock.From his website:"My firm Lebed Biz LLC was compensated by a third-party (B&D Capital Partners) $20,000 cash for a one-month GPR investor relations contract which has since expired. We could potentially be compensated more for providing investor relations services regarding GPR in the future, although no agreements have been made at this time."

Report this Post 3 Comments HarryCarysGhost (99.39) Submitted: 6/13/2011 9:51:12 PM Recs: 0

Hmmm!

Are you calling this a pump? (I'm not disagreeing btw)

Report this Post silverminer (99.91) Submitted: 7/6/2011 11:56:02 AM Recs: 0 Rec This

Had you known the underlying company the way I do, you might have been able to discern just how much you could stand to lose by betting against Great Panther. I have held this stock since 2005, and it is my second-largest equity position after Silver Wheaton. Anyway, I hope for your sake you didn't short the shares in real life.

Report this Post HarryCarysGhost (99.39) Submitted: 7/20/2011 9:32:11 PM Recs: 0

Sinch could I request a GPL article.

I have the normal worries of Nationillzation.

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#22) On August 13, 2011 at 10:51 PM, goldminingXpert (29.54) wrote:

Yes, hiring Lebed does smack of pumping.

And no, you do not need to fear nationalization. México is not prone to that sort of thing.

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#23) On August 13, 2011 at 11:39 PM, Frankydontfailme (27.42) wrote:

Do you have evidence that they hired Lebed? 

It is certainly possibly that Lebed was pumping the stock for self interest (he owned the stock). 

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#24) On August 14, 2011 at 12:50 AM, XMFSinchiruna (27.88) wrote:

Okay Fools, here's a question for you. What are we to do if it turns out there is absolutely no substance nor credibility whatsoever to the allegations leveled against GPL by GMX and his hero Otto? What are we to do as a community with GMX for his repeated pattern of unrepenting overconfidence in the way in which he levels his drive-by claims against mining companies that never stand up to scruitiny?

http://caps.fool.com/Blogs/a-must-read-setting-the/628845

Shall we finally demand that he change his username? Shall we all extend my dare to him to initiate a short position against GPL in CAPS and hold it for a period of 2 years alongside his active short against AUQ? Of course, we have no authority to impose any sanction whatsoever, but you all have the ability to request that he ingest a fitting slice of humble pie.

For the record, I of course have no problem with Fools expressing an opinion or perspective that's contrary to my own. The reason I get so fired up when GMX starts swinging at quality miners -- and I admit I do get fired up when it comes from him because I have already discredited so many of his prior assertions ad nauseum -- is also a product of the careless and poorly researched nature of his negative assessments of companies leveled over the course of the past several years. It's also his noteworthy failure to adopt a more respectful or humble tone in light of his self-admittedly poor success rate.

Respect and credibility are earned, GMX. That's the same thing I told you in 2008 after you danced in celebration at the misfortune of your fellow Fools. I have given you second chance after second chance to bury the hatchet between us, but you never seem to shed your insistence upon presenting scantly researched material with an undeservedly authoritative tone.

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#25) On August 14, 2011 at 1:22 AM, XMFSinchiruna (27.88) wrote:

GMX: "He discovered accounting shenangians which the company fessed up to today"

Actually, no ... he did not! That statement is false from start to finish!

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#26) On August 14, 2011 at 1:24 AM, HarryCarysGhost (99.71) wrote:

Sounds fair,

whaddya say GMX red thumb for two yrs.

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#27) On August 14, 2011 at 2:55 AM, goldminingXpert (29.54) wrote:

Testing

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#28) On August 14, 2011 at 2:57 AM, goldminingXpert (29.54) wrote:

You totally missed the point Sinchy. Cash costs and Cost of Goods sold. Two different things. GPL reported one as 3 million, one as 6 million. This quarter, they reported them the same, as they should, and cash costs went up more than fifty percent.

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#29) On August 14, 2011 at 3:39 AM, XMFSinchiruna (27.88) wrote:

GMX: You're 100% wrong! The facts, if you care to read them more thoroughly, speak for themselves.

http://caps.fool.com/Blogs/a-must-read-setting-the/628845

How can I be more clear? Let me take care to refute some more of the individual falsehoods from above:

A turn toward honest accounting sends the stock down 10% today and more to come

Since the cost accounting did not change one iota, there was no turn of any kind.

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#30) On August 14, 2011 at 3:43 AM, XMFSinchiruna (27.88) wrote:

"the company was undercounting its cost of production through dubious accounting"

Wrong ... there was no dubious accounting. The company calculated cash costs in precisely the same fashion as major producer Pan American Silver. The facts speak for themselves:

http://caps.fool.com/Blogs/a-must-read-setting-the/628845

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#31) On August 14, 2011 at 3:47 AM, XMFSinchiruna (27.88) wrote:

"Now that management has sold out of its positions, it goes back to using normal accounting and the stock tanks."

Wrong ... there was no change whatsoever in the cost accounting procedure for calculating cash costs.

The facts speak for themselves.

http://caps.fool.com/Blogs/a-must-read-setting-the/628845

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#32) On August 14, 2011 at 3:48 AM, XMFSinchiruna (27.88) wrote:

"I would think the real menace would be Golden Panther management who deceived you about their cash costs, sold out their shares at inflated prices, and then fessed up "

Wrong! There was never any deception regarding cash costs, and cash costs were calculated in precisely the same way for both periods. Is that part getting through to you yet?

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#33) On August 14, 2011 at 4:02 AM, XMFSinchiruna (27.88) wrote:

"At comment nineteen, yes, GPL was understating the cash cost of production before by oddly leaving out costs such as depreciation and amortization. The posts I link in the blog post explain the accounting that caused this swing."

Wrong! GPL was not understating the cash cost of production, as they employed a common methodology for calculating that cost that is/was identical to that employed by major miner Pan American Silver (even though the blogger linked in the OP above states "Comparing the GPR cash cost metric to the PAAS cash cost metric is stupidity squared, because one of them is a fair representation of what goes on in the mining world and the other one is just laughable"). Newsflash ... they are wholly comparable metrics between the two miners. It also was not a change in accounting that caused the change in GPL's costs.

This blog post, the posts linked in the original post, and the authors of both have been thoroughly debunked out in the daylight of the factual record.

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#34) On August 14, 2011 at 4:20 AM, goldminingXpert (29.54) wrote:

Since you linked to your blog three times, should I read it three more times, even though I have already commented on it?

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#35) On August 14, 2011 at 11:14 AM, XMFSinchiruna (27.88) wrote:

GMX: Yes, because you still don't understand the basics of cost accounting in the mining industry. I recommend reading it ad infinitum until you do.

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#36) On August 15, 2011 at 3:46 PM, XMFSinchiruna (27.88) wrote:

http://caps.fool.com/Blogs/a-must-read-setting-the/628845

I've decided I'm done engaging directly with GMX. Attempting to reason with him in discussions of fact have proven to be a complete waste of my time over the past several years. Although it's a simple task for him to level baseless allegations against companies, my wish to ensure that my fellow Fools not fall victim to unsubstantiated claims or misinformation has compelled me to rebut those drive-by attacks as I have here above and throughout the CAPS archives. For the record, I have put in my time in that pursuit, and I am now done.

So let this serve as fair warning to all members of CAPS who may in the future be tempted to permit their opinions of a company to be even remotely impacted or swayed by this individual's posts: you risk walking into a world where facts are not welcome, where research consists of a link to some dude's blog, where prior failures never yield a less authoritative tone, and where shorting stocks against the tide of our generation's most powerful secular bull market is somehow not considered folly. Only you can protect yourself from that world by not walking through that door, because I will no longer carry responsibility for revealing the emptiness or carelessness of his future allegations.

I'll leave a sign hanging on the door: "Danger: do not enter!" But I will not be there to stand guard. Enter at your own risk.

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#37) On August 15, 2011 at 4:06 PM, goldminingXpert (29.54) wrote:

Good day to you too.

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#38) On August 17, 2011 at 5:48 PM, Frankydontfailme (27.42) wrote:

http://www.fool.com/investing/general/2011/08/17/exclusive-setting-the-record-straight-on-great-pan.aspx?source=ihpsitota0000001&lidx=6

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#39) On August 17, 2011 at 6:10 PM, goldminingXpert (29.54) wrote:

The above link is in response to this: http://seekingalpha.com/article/287591-great-panther-shares-likely-to-continue-limping-lower

I would note that Sinchy has already, in a dramatic way, broken his promise from comment #36.

Not that I mind. The debate is good for investors; more knowledge is always useful. 

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#40) On August 17, 2011 at 10:37 PM, XMFSinchiruna (27.88) wrote:

http://www.fool.com/investing/general/2011/08/17/exclusive-setting-the-record-straight-on-great-pan.aspx

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#41) On August 17, 2011 at 10:44 PM, SN3165 (< 20) wrote:

So goldminingxpert...  why did SA pull the article??

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#42) On August 18, 2011 at 4:29 PM, XMFSinchiruna (27.88) wrote:

Here's Part 2:

http://www.fool.com/investing/general/2011/08/17/exclusive-setting-the-record-straight-on-great-pan.aspx

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