Hello Vaughn,
Finally, someone with longer posts than me!! ;-)
As for the "sage and sober" advice, ask around, neither would come to the minds of most who know me!!
Some thoughts from your last two posts:
- If the pipes already discovered at Yamba looked economic, why has no one, including SUF (having just had a more detailed look), become excited? More money down the same hole isn't the answer.
- you cite the P/E multiples from Barrick and Placer as examples of value from "local" production. I'd suggest that cash flow multiples would be more appropriate, but in any event would note that Barrick's biggest acquisition in recent memory was that of the Pierina (Arequipa Res) property in Peru, hardly a hotbed of democracy or stability, and Placer just did a huge deal in good 'ole RSA for an undercapitalized project in the South Deep area, the largest undeveloped gold project on the Witwatersrand, along with initiating construction (to the tune of $575 million) at Las Christinas in Venezuela, yet another banana-type republic, while just announcing today that exploration expenditures would be slashed. So, contrary to your opinion, it seems the larger mining firms are picking up foreign reserves with much work already done, ahead of domestic situations. Points to SUF for thinking like the big guys!
- the situations of Dia Met and Aber, upon initial discovery of their world-class deposits, is a case of that-was-then, this-is-now. Firstly Dia Met took every one by surprise (except CJ who was staking ground for Aber and SUF), and followed this with several unheard-of results, eventually leading to Canada's first diamond mine. It is very important that this is Canada's first, afforded greater respect, greater admiration, greater following than all others to follow. Aber developed spectacular results, several economic pipes, but has wallowed because it's #2, with development OKs not yet in hand. Other seemingly economic deposits have been found by MPV and WSP, and while the market has afforded both firms decent valuations, they're a far cry from the levels attained by Dia Met and Aber previously. WSP had impressive results just last week, and the stock is lower, with ore that has been valued at US$181/ton. Put this discovery in RSA, and SUF would've had it in production already, not been encumbered with the thought of more and more bulk sampling to firm up feasibility (next winter?). I'm not sure I'd want the 4th or 5th mine near Lac de Gras. And now the natives are restless (hands out?).
- SUF has not just done the same old things (Brazil, the Messina platinum deal), but I'll agree that what SUF is doing is not working for shareholders. Plainly, all shareholders deserve better value for their stock. I think most would agree that SUF needs to communicate their vision, plans, news, etc. in a better way. They say they are taking appropriate actions. I'd like to see this speeded up dramatically, but, well, thats SUF. Always a little slower than you might expect. I do believe that the excellent technical abilities of SUF will eventually be exposed. For example, as Messina gets a bankable feasiblity study, as low cost production at Camafuca is demonstrated, as new discoveries at Marsfontein/Klipspringer are unearthed, as production/discoveries in Brazil emerge, the share value will progress. Will this happen tomorrow? No. Has SUF disappointed previously? Yes. Does this hurt today share price? Yes. Will the "hot money" look for other places to play? Yes (look at the seller from TK).
- Rex Diamonds, while not a favourite of mine, has un-profitable fissure mines in RSA and large blue sky in Sierra Leone. Sound familiar? Except that SUF's fissures will be nicely profitable (and aren't 500m deep yet!), and SUF's blue sky in Angola has been somewhat quantified, production costed, and seems better protected from unfriendlies (and SUF didn't have to finance the revolution, or was it counter-revolution?). Rex, RXD on TSE, has gone from 73 cents to the $2.80 range recently.
- You comment that SUF is "Blindly following a course of action to the exclusion of all evidence to the contrary is not a whole rational policy" is unfair/wrong. SUF has the results from Munn and Yamba, and in my mind, are better suited to weighing this evidence than either you or I. As I said before, their technical ability to weigh these facts is precisely why I own this stock. I believe they are being quite rational. Don't confuse irrational (crazy) with unlucky (not finding an economic pipe in NWT - yet).
- "Failing to recognize what the market is clearly telling you also is not only irrational, but plain bad business." If this applies to NWT, then see above; if it applies to the share price, and why some large sellers seem to have cratered this price lately, I agree that it is bad business. SUF should actively seek out sellers of their stock, completely inform, and then if a sell decision is still in force, help to arrange an orderly transfer to those who would be buyers. While I believe SUF has made efforts in this regard, they have not done enough to protect their shareholders (us) from economic harm. I believe this will correct, but if you can't wait, then you must find another answer.
- You state that SUF is "ignoring or de-emphasizing Canadian asset discovery is a short sighted and misguided." Please disclose how you know that SUF is ignoring, or hiding something. They say they are not. In person, they admit disappointment to not having the huge NWT discovery. And they've turned their efforts elsewhere. I applaud their 7 year effort up north, but when they decide to focus elsewhere, that is good enough for me. Its not like they haven't had tremendous successes at Klipspringer, Marsfontein and even in Angola, all places where revenue has been earned to drive further exploration, including the seemingly bottomless pit in the NWT.
- "Capital goes to where it will be rewarded today not tomorrow." Couldn't agree more with this statement. So long as portfolio managers, fund managers, etc. concentrate only on this month's or this quarter's performance, then the hot money will go to internet stocks, and the like. For my money, over the long term, I like, understand and appreciate the value approach. Benjamin Graham, Warren Buffet, Charles Brandeis, etc. have been successful because they looked down the road a few years rather than concentrating on the flavour of the month. (CNB and SWG are two other miners that fit this bill)
Finally, I will agree to disagree with you. And suggest, again, that you should discuss your issues not with me, but rather with CJ, KF, LB, HB or whomever at SUF you feel could best respond to your concerns.
Regards,
Confluence |
