A Sandstorm is Coming...
November 18, 2010
– Comments (17) |
RELATED TICKERS: SAND
, SLW
, GLWGF.PK.DL
First off, I'd just like to say Happy Aniversary to Silverminer/TMFSinchiruna!
Everybody who follows him religiously like I do knows what I'm talking about: His legendary call on SLW was made on November 19, 2008 (on the Silverminer Profile). If you would have put $10,000 down on SLW when he first brought it to our attention at $2.91 (on his Silverminer profile), how much would you have made? The stock currently sits at around $34 today, a solid ten-bagger in two years. I'm not good at math, but I'm pretty sure you would have more than $100,000. And many Fools, Sinch and myself included, believe that SLW is well on its way to $100...
Sure, if you enter SLW now, you probably would get the gains you would have if you entered in 2008. It's a bummer, I know. But Fools, know this: There are still ten-bagger opportunities to be had.
And Sandstorm Resources is one of them.
Sandstorm Resources is a gold royalty company. Though they have only been operating for under two years, Sandstorm has completed four royalty acquisitions in that time.Three of their four royalty streams will come online in the next year, and the fourth is expected in 2011. Below are the details. The following is taken from a Seeking Alpha article entitled "Sandstorm Resources: The Next Big Thing" by member Hyperinflation (Someone's blog I highly recommend you to follow).
· Aurizona Project - 17% of attributable gold production for LOM, which will initially produce 60k oz/year, ramping up to 80k year with cash costs of $400/oz. They also have the option to purchase 17% of the gold produced from the underground mine ( should Luna Corp decide to develop it). In this case annual gold production will increase to a range of 100k-125k/year.
· Saint Elena - 20% of attributable of the projected 40k annual production. The kicker here is the purchase price of just $350/oz. Additionally this mine has underground potential which Sandstorm will have claim to should they develop it. This would bring total mine production to an estimated 60-70k/year.
·Summit Mine - Sandstorm will initially receive 50% of the first 10k mined, followed by a 22% interest in this small mine. Production estimates are expected to be between 12-14k/ year. Cash costs again are at the low end $400/oz. The operator also has the right to offer Sandstorm an additional 25% interest. This is a key example of generating immediate cash flow ( indicated through the provision above).
·Ming Mine - Production expected to commence in mid 2011. Initially Sandstorm will receive 25% of the first 175k produced followed by 12% thereafter. Gold production is projected to be between 20-25k annually with excellent upside potential.
In addition, they have nearly 90 million cash on hand, and zero long term debt. But this still isn't the reason I was brought to them. No, it was their management... The Former CFO of Silver Wheaton is the CEO of Sandstorm Resources.
In my opinion, aside from getting into Great Panther (my largest holding, GPRLF.PK) in the 60's and 70's, this is currently THE best chance for Fools to grab a ten-bagger.
Full Disclosure: I own SNDXF, SLW, and GPRLF.
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