The Rude Awakening
Edinburgh, Scotland
Monday, May 7, 2007 ------------------------- - Digging for gold under big blue skies,
- Your outside bet hits the table,
- A big boom in little uranium and much more…
------------------------- Joel Bowman, reporting from Bonny Scotland… Most people don't have enough to lose large or to lose often. The virtue of prudence compels them to stick to the fundamentals when trading…to map out a conservative, easily attainable plan for security…to avoid gambling unnecessarily. If you find yourself nodding along at this point, you may wish to return to your coffee and continue with the rest of your morning emails…the following insights from the inimitable Rude readership will be of little interest to you. Last week we sounded the conch for the daredevils, the entrepreneurs, the madcaps and the swashbuckling speculators. "If you have an outside bet lurking on the fringe of your portfolio," we wrote, "perhaps you would like to share it with the rest of the punters. Email all certainly-not-certain, surely-not-sure things to us here at aussiejoel@the-rude-awakening.com ." And email you did… Below you will find a smattering of the emails from the Rude inbox. We hope you enjoy them. We'll not fail to mention, of course, that the following emails do not necessarily represent the views of your editors, nor do we vouch for their accuracy. These are speculative plays and, where it has been made known to us, we have included disclosure of the author's ownership in the company. As always, be sure to conduct your own research before taking any action. ------------------------- Hi Joel:
I've always read about the great investors: they worry first and foremost about their downside risk. The upside potential then takes care of itself.
With that in mind, I made Tyhee Development my favorite gold stock and also the most heavily weighted in my portfolio.
Here's why:
They are sitting on a global gold resource, compliant with 43-101 standards of reporting under Canadian Law, of roughly 1,500,000 ounces. They are situated in mining-friendly Canada, where property rights are as protected as they can get. In addition, they own a property that has a resource of 600,000 ounces of gold, but is not compliant with 43-101 standards, because that deposit was delineated before the newer reporting standards were established. The CEO thinks the gold is there and probably expandable even more, as it sits in the very same type of geologic setting
as his current 1,500,000 ounce deposit at the Ormsby Zone.
In addition, When gold went above $500/ ounce, the company changed its focus from underground mining of its 1,500,000 ounces (contained in 2 distinct deposits) to open-pittable bulk mining, and is busy recalculating and updating its global resource for these 2 deposits. The CEO is on record as saying that he thinks there's a good chance the resource will go up by an additional 1,000,000 ounces.
So the total projected resource might be as high as around 3,000,000 ounces. At an in-situ valuation of $100 per ounce in this environment of $700 gold, the total value of this package would be on the order of $300 Million Dollars. Divided by 160,000,000 fully-diluted shares, and you have a rough share price of $2.
The stock currently trades around 50 cents Canadian, on the
Toronto Venture Exchange, under the symbol TDC.
There is also a lot of blue sky there, as most of the ounces are no deeper than 400 meters down, but most other mines ever mined in the area, were mined to depths of 1,000 meters and deeper. The CEO, David Webb, a PHD in Geology who did his Doctoral thesis on the very area he's operating in (Yellowknife, NorthWest Territories), thinks this projected mineralization at depth is very likely.
Additional blue sky, among many other properties under their control, is a property they recently staked close to Yellowknife, which the CEO says has certain rare characteristics from a geologic point of view, that lead him to believe it could be similar to the Cripple Creek deposit in Colorado operated by AngloGold. That deposit produces about 300,000 ounces of gold per annum.
Now I know this is all blue sky, and no more. But the point is the shares have very limited down-side risk, and very high upside potential reward within the next 6 months to a year, just based on current reality. The blue sky is really just icing on the very sweet cake.
This gold junior is a deep-value keeper!
Regards,
Mort Rosner --- An Outside Bet…With An Inside Guarantee --- "Double Your Money Average On Every Trade" Steve Sarnoff, options guru, has not had one recommendation lose value since Aug. 8, 2004. He's on a Red-Hot Winning Streak…and now you can and get in on this jaw-dropping winning streak at HALF THE PRICE! …But you have to sign-up by May 14. read the full report here. -------------------------------------------------- Dear Rude, Perhaps you might care to investigate Pinetree Capital (TSX:PNP). This company is a merchant bank involved in the purchase of a spread of mining shares - mainly gold, silver, copper and uranium with some oil. Recently they had a 1 for 2 split, which dropped the share price some but was very healthy for the initial investors. At the moment they are buying loads of junior mining shares and warrants. It's well worth a look, especially as the Canadian uranium prospectors do not suffer from the ridiculous restrictions active here in Oz. Even if Howard's policy gets accepted I doubt it will mean open slather for uranium search. More likely relaxation on restrictions on his big boy mates only. Regards from Oz,
Colin Barnes ------------------- Dear Rude, Take a look at Vangold Resources. This is a junior mining exploration company that is really a hybrid commodities company. It has producing oil and gas properties in Canada and the USA as well as new massive oil and gas leases in Rwanda and Kenya. It is a junior exploration company that is actually making money and therefore does not have to dilute you to death in the process of performing the exploration. It has seven gold, copper prospects in Papua New Guinea that are advanced stage. Several of the prospects have 7-8 gold anomalies on each property so the real number of gold prospects is actually higher. They also have 5 leases in Uganda that border existing Cobalt mines and one of the world's largest aero-magnetic anomalies that is 30 miles on trend from the second largest nickel deposit in the world being developed by Barrick across the border in Tanzania. They also have 7 beryllium mines total in Brazil and Uganda that are in the process of being spun off into another company that Vangold owns 51%. This stock is selling for $0.73 a share Canadian…with 80 million shares outstanding! It's like owning a commodies fund with gold, copper, cobalt, berrylium, and oil and gas! I am obviously very bullish on this stock, own it, and think it is tremendously undervalued.
Lane Garrett ---------------------------- Dear Rude, Check out the company named Pele Mountain Resources GEM on the Canadian market. This is a genuine Uranium play in Elliot Lake, Ontario, Canada. I live in this town that was once known as "The Uranium Capital of the World." We have billions of dollars worth of Uranium with a first stage refinery, Cameco, just 35 minutes away! Have a Great Day! Peter Burtoft ---------------------------- Dear Rude, Most astute investors by now are AWARE of the explosive uranium boom and have seen the list of 16-20 uranium explorers-miners whose stock prices have grown anywhere from 200% to 1600% in the past 2 years. Interest seems to be focused on many stocks in the $15.-$30 range that have already had their major growth spurt. I found a relatively unknown (at the time) explorer with vast land holdings in previous PRODUCING uranium mining zones with excellent prospects that I think have far more potential upside than the bigger and well known companies in the news such as Cameco and SXR and Denison Mines (which I do own due to merger with former International Uranium) as well as several other smaller uranium related stocks, but there is one in particular I think has a great risk/reward profile. I bought Mesa Uranium MZU for .76 in Jan/07 and the exploration news has been steady and encouraging, the operators seem to know what they are doing and as Doug Casey and other astute investors in this field keep saying about mining stocks, MANAGEMENT is KEY to successful companies. Regards,
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