Currencies, Gold, Silver and Oil

[stolwyk]

SELECTION OF GOLD EXPLORERS.

Please note that various approvals need to be obtained before mining can proceed. There can be no guarantee that these will be given.

Resources are expanding most of the time, so any resource listings are only valid up to the date of listing.

Al metals including Gold are quoted In Situ.

In some cases, the other metals have been converted to "Gold equivalent ounces" based on $US1.45 for Copper and $US6 for silver. Gold is assumed at $US415/ounce.

TSX is the Canadian TORONTO exchange. A Warrant is expressed thus: WT, eg NG.WT
Supply of warrants can decrease over time and this may result in some "uneven" trading.

So, summarizing, what type of stock did I select?
1. I prefer the North of Canada and Atlaska where the big deposits are. Costs are low per ounce and there often are metal credits as well. There are no souvereignty problems although agreements need to be made with native tribes.

Canada is pro mining while Alaska is even more so: Their program: "Roads to resources" pays for new roads and bridges.

Nova Gold is well known for making agreements with the Alaskan Govt and tribes and was therefore selected as a partner by Placer Dome on their 25 mill + ounces gold Donlin Creek resources. (The latter was defined after drilling of 2 km with another 8 km of that trend still to be explored.

2. I kept clear of companies who didn't have an aggressive expansion policy.

3. I went for mass and these had to be exploration companies where the share price curve can be the most positive ( increase of price) while the resources are rapidly increasing.

Finally, the companies tend to show different characteristics, eg the state of progress made.

So we have:
NDM.TSX: At least 3 years to go before mining can start on a massive scale. Few shares. At the moment resources are 27 mill ounces of gold and 16.5 bill pounds of copper. The Equivalent is a total of 84.6 mill ounces gold.

NG.TSX: Start mining in 2006, followed by a much larger mine in 2007, then another one and a joint ventured massive mine in 2008.

Few shares. The resource is 17 mill ounces of gold, some 100 mill ounces of silver and 7.7 bill pounds of copper. About 2 mill ounces of gold can be added each year while drilling proceeds.
The last resource statement was in May and I expect 2 mill ounces to add before Dec 31.

The Equivalent in May was a total of 45.3 mill ounces.
I have NG.WRT

WRM.TSX: It is a producer and buys up mines to increase ounces. (Has $US200 mill cash and $US300 mill credit). It also explores. Has quite a lot of shares but little need for new dilution. Top Management and rapid expansion; Likes to buy cheap. No hedging.

Resource (probable, measured and indicated) about 11 mill ounces of gold, 33 mill ounces of silver and has copper. Has been mentioned as a takeover candidate.
I have WRM.WT

NCM, an Australian producer and expanding quickly. Has hedging. A very large company with very low costs coming up shortly. Resources 58 mill ounces of gold and a massive amount of copper. I have NCM.

SEA.TSX: Few shares, one or two key projects, prefers not to run a mine themselves. I don't have SEA.

NNO.TSX: Large copper-gold-molybdenum porphyry deposit and 12.5% stake in ALUMBRERA.
Their deposit AQUA RICA in Argentina has about 10 mill ounces gold and 18 bill pounds copper. With say Gold at $US415 and Copper at $US1.45, the equivalent total gold resource would be about 72.9 mill ounces gold.
I have NNO.WT

The mentioned companies have a thread on this site.


Gerry
Holds NDM, NG.WT, WRM.WT, NNO.WT, NCM.
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks.

[stolwyk]

THE BIGGER EXPLORERS AND OXIANA (OXR).

Please refer to my previous post for background. Share values in $CAN. Other metals can be converted to Equivalent ounces on the basis of $US1.45/lb (Copper), $US6 (Silver) and $US415 (Gold). Note: Projects referred to will need environmental and other approvals.

1. NDM: Shares: 45 mill. Fully diluted: 52.3 mill. Cash on 17 Aug: $10 mill. Share price: $6.27. Prebble deposit to be driilled in 2004, already 169 holes drilled before. Copper and Gold. Equivalent ounces of Gold: 84.6 mill. Several studies this year are being done. I believe, a BFS could be completed in 2005; mining to start in 2007?

2. NG: Shares: 62.8 mill; Unlisted Options: 6.6 mill. Warrants (NG.WT): 3.6 mill, to pay $7.0 to convert before 1 Oct. 2008. Fully diluted: 73 mil. Cash $60 mill on 1 July. Share price: $8.17. NG.WT: $3.40. Copper, Silver and Gold. Equivalent ounces of gold: 45.3 mill. BSF: 2005. To start mining in 2006. (100,000 ounces.), Total cash and production costs $US200/ounce.

By 2007 (Gnome and Galore Creek), about 370,000 ounces of gold, 200 mill lbs copper and 1.8 mill ounces of silver/year could be produced per year. Equivalent ounces of gold: 1.09 mill. Massive Galore Creek deposit: Total production and cash costs CAN15 cents for copper, using Gold as a credit or minus, yes - CAN$180 ounce if Copper is used as a credit.

By 2009, about 600,000 ounces of Gold, 200 mill lbs of Copper and 1.8 mill ounces of Silver could be produced. Equivalent ounces: 1.32 mill.

3. NNO: Shares: 110.9 mill shares and 53.2 mill reserved units, consisting of about 41 mill Warrants (NNO.WT), to convert on May 30, 2007 at $1.65. The rest will be Company Options to Management. Fully diluted: 164.15 mill. Cash (May) $US41 mill . Share price: $3.38. NNO.WT: $1.80. Copper and Gold: Equivalent ounces of gold: 72.9 mill. Close to a BFS but mining date is not certain.

+++++++++++++++++++++++++++++++++++++++++++++

OXR: 1187 mill shares. Gold: SEPON: Resources: 1.3 mill ounces.
From Presentation: Khanong: Copper: 1.12 mill tonnes (Equivalent ounces of gold: 8.61 mill mil.) Deduct 10% for Govt participation; net: 7.75 ounces of Gold
From Presentation: Prominent Hill: 1.455 mill tonnes of copper and OXR has 65% of this or 0.95 mill tonnes or equivalent ounces of Gold: 7.26 mill.

Also Gold: 1.56 mill ounces and OXR has 65% or 1.014 mill ounces.
Total Equivalent ounces of gold from al sources: 17.3 mill ounces. To start production: Febr/March 2005. Within 5 years from the start (2010), OXR hopes to produce 500,000 ounces of gold and 200,000 tonnes of copper annually, or an Equivalent 1.53 mill ounces. Total production will be about 2.03 mill ounces of Equivalent gold per year in 2010.

In the next section: $CAN=$A1.0866. Resources = Equivalent ounces of gold. Ounces per $A CAP: Based per $1 cap market value: Shares*Share price

++++++++++++++++++++++++++++++++++++++++++++++++++ ++++++++
Company. 1: Resources. 2: Diluted shares(M). 3: Share price ($A). 4: Ounces per share. 5: Ounces per $ACAP
NDM. 1: 84.6. 2: 52.3. 3: $6.81. 4: 1.617. 5: 0.237
-NG. 1: 45.3. 2: 73.0. 3: $8.88. 4: 0.620. 5: 0.070
OXR. 1. 17.3. 2: 1187--3: $0.88. 4: 0.014. 5: 0.016

Discussion: OXR had expenditure on the plants and ideally we ought to adjust the Nova Gold and NDM results to reflect that. OXR will start production in Feb/March 2005; NDM most likely in 2007, needing a plant costing some $CAN500+ mill.

NG will start in 2006 ; we'll allow $CAN40 mill+ for Plant in 2006 and the main production will start in 2007 (Galore Creek). We allow $CAN400+ mill for that Plant or $CAN440+ mill for the 2 plants.

At the current higher share prices, both companies can attract far more bank credit than OXR could. Abovementioned construction costs of NDM's and NG's are deemed to be 2004/2005 year's costs.

Assume that financing of the Plants is 50% by the Banks and 50% by the shareholders (unless there are preference shares as well). Then based on the current prices ($CAN), MDM needs another 39.9

[whiteheron]

stolwyk

I am (for me )very heavily into OXR

In all of the research that i have done on mining companies OXR is in the top 2 or 3

Without going into too many details it has everything going for it , eg current gold producer , strong financial position , first copper production early next year
With the present and increasing gold and copper prices and the extreme shortage of copper supplies need i say more

One that i am sure will fire with both barrels ie both gold and copper
And thats not counting Prominent Hill !

Must be a winner
Time will tell , as always

[whiteheron]

Oops !!!!!

The end of the first line of the third paragraph should read -------, first copper production due early next year

Sorry about that , something obviously came unstuck

[Mick100]

quote:Originally posted by whiteheron

stolwyk

I am (for me )very heavily into OXR

In all of the research that i have done on mining companies OXR is in the top 2 or 3

Without going into too many details it has everything going for it , eg current gold producer , strong financial position , first copper production early next year
With the present and increasing gold and copper prices and the extreme shortage of copper supplies need i say more

One that i am sure will fire with both barrels ie both gold and copper
And thats not counting Prominent Hill !

Must be a winner
Time will tell , as always

Whiteheron, I'v seen so hype regarding Oxania I decided to have a quick look at it.

Measured, indicated and inferred resources - 3.5m oz's Au, 5.0m oz's Ag (1 gm/ton cut-off)

850000 tons copper

950m shares on issue

I really fail to see what so many other people appear to like about this company. I'm holding about 10 miners in my portflio at present
and I'm glad to say that OXR is not one of them. I wouldn't buy it at half the current price from what I know of this company.

I must be missing something


Mick

[whiteheron]

Mick100

Based on what you say i will re visit OXR as it is a wee while since i looked at it and it is difficult to remember all things about each company when one looks at so many

I purchased several parcels at mid to high 70c to 80c range so i am well in the money at present

I hope to post again on this within the next day or two

[stolwyk]

This is the key section from my last post:

+ + + The amended "ounces per share" -See table- will now be: NDM: 0.917; NG: 0.453 and OXR: 0.014.

+ + + The amended "ounces per $ACAP"-See table- will now be: NDM: 0.1347; NG: 0.051 and OXR: 0.016
_________________________________________

Comment: An NDM share will buy you a resource of 0.917 ounces IN SITU. At $US415 an ounce, that is $US380.55

However, the price of the share was CAN$6.27. and for that 0.917 ounces resources, the value is: $US380.55*1.2516= CAN$476.30.
____________

The definition of ounces resources per 1$ACAP. For NDM, that is:
Ounces/(shares*shareprice) or 84.6/(92.2 mill shares*$6.81)= 0.1347 US$= A$1.361:

Per $A of the market capital, you will get a resource of 0.1347 ounces In SITU or $A76.00
______________________

Sometimes one is asked what the cost per ounce resource of gold is. In NDM's case for the CAN$6.28 one gets 0.917 ounces, so the cost per ounce resource would be Can$6.85 Ideally, both numbers ought to be in $US:

+ + + So the cost per ounce of gold resource for someone who bought in Canadian currency is $6.28/1.2516/0.917= US$5.47 per ounce per US share. US$=CAN$1.2516

+ + + For NG: 8.17/1.2516/0.453=$US14.41 per ounce per US share.

+ + + For OXR: 0.88/1.361/0.014= $US46.18 per ounce per US share.($US=$A1.361)


Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks. To visit archived posts, please use the Search button

[whiteheron]

stolwyk

I suspect that i may be having problems with my computer

The last 2 postings on this subject that show as originating from you are 9/10/04 at 7-27pm and 10/10/04 at 6-26pm , but i have a feeling that you had another posting on 10/10/04 at about 5pm ? as i am sure that this showed up on the summary of posting , but no such posting has ever shown up in full on my computer --- but maybe i am mistaken

Earlier in the day the end of one of the lines in a posting of mine was not showing or was cut off , but this now seems okay (see above )

Perhaps you can check and see if i am missing a posting or not

Thanks

[stolwyk]

That post of 9/10, time 7.27 was written today. It replaces a reminder that the space was reserved for calculations which I did today.

Other than that the system is complete.

Gerry

[Gofish.]

One of the attractions of OXR is that the area they have in Laos is substantial, with a lot more exploration to be done. Drilling is expensive - there is no point doing unnecessary drilling once you have proven up sufficient resources to satisfy or exceed the project BFS. Money is tight for development companies.
They consider - with some "scout" drilling to back it up - that there is a lot more gold and copper out there. The numbers in actual proven resources and reserves do not tell the full story.
If you look at the recent OXR presentation you can see a number of projects staggered over the next 3-4 years so that as one project comes on stream (eg gold upgrade this year to 230K Oz/pa) the another is progressing to production (copper March 05)
Management is well regarded as while they have heavily promoted the company, they have generally underpromised and overdelivered.
With the right ground, plus other projects like PH, they can continue on a growth path for some years.