DEZ
Below is a summary of the major pinkeyepete2
posts on Yahoo ...
Go to the section below called
PETE'S POSTS
Ignore this ... its a continuence of a discussion
with my son ... put to writing.
PREFACE
(Ignore this preface - it is for my son John - an english major who I am walking thru (my version of) economics ....)
John RECALL ....
(*a) General theme - USA currency devaluation
(the real price of the dollar is $-0- but this is
not perceived yet)
(*b) Replacement currency - anything you can't dilute
(the real price of gold is unknown as right
now the perceived price of the dollar is > $0
and only NOW countries/institutions/*folks*/
e.g. (China/Russia (200 tonnes/? tonnes)
will begin to hold onto thier gold
i.e. will use THEIR currency to buy
gold (internally) rather than USA debt
This will increase the borrowing costs of the
USA govern't.
Why? <g>
Well if the countries are using *their* currency
to buy gold there is less *foreign* money to buy USA
debt instruments. Gott it? ) So ... to *induce* them
to **please** buy our debt .... we will *increase* the
interest rate on the debt we pay to them.
This means we have to pay back more USA dollars as interest
payments to the holders of debt.
Question:
If there is less SUPPLY of Gold and the
same number of buyers .... what happens to the
price of Gold?
Additionally - and I know you do not understand the word
SHORTING .... but to some unknown amount (A BIG AMOUNT) .... some institutions out there that have *already* shorted
gold. This goes *years* back .... I am guessing.
Shorting means ... **selling** something you *don't*
have.
Sooner or later these sellers have to buy whatever
it is they sold ... so as to *deliver* it to the
person that bought it.
As I already showed you ... one financial firm said that
if all the shorters covered (covered means buy what they previousl sold) the price would be at $850.
Actually the *real* number is unknown because *no one* could
accurately factor in how all the other buyers of gold
would *react* if these shorters came in to buy gold.
i.e. the price could be lower -or- *much* higher.
Finally, none of this will unfold quickly.
The primary reason being the Fed will keep raising interest rates up to a point.
As they raise interest rates this will forestall the collapse of the dollar as I keep harping on.
Unfortunately, at some point the Fed will stop
raising interest rates.
Why?
Because as rates increase people in the USA (people and small business/and large business) have a harder time getting loans to grow their own business which - in effect - kills off employment. At that point it gets **very political**
because every party is sensitive to *supporting employment*.
The end game is .....
The Fed stops raising interest rates ... and the shit
begins to hit the fan ....
Could I be *wrong*. Absolutely ... and I certainly hope so.
Is it doomsday? Nah ... we will muddle thru.
Is China a superpower? Nah ... disallow their products
into the USA and they would fold up in a nano-second.
Really. Their banking system is a *mess*.
But .... this will change.
Whose is a superpower? Walmart .... and somebody (here)
had better fix that. They are *killing* their own.
(and your Dad, and Mom, and you are collaborators in
this killing process)
continuing .....
(c) Assets in the ground ....
(d) Identification of *how many* assets ....
(in our case oz. of gold)
(e) Ability to get assets .... and sell them
Are there better gold stocks than DEZ?
Yup .. lots of them.
Then why DEZ?
**You** find a better one and we'll talk it over.
But *not* until we fully understand how much
gold in the ground DEZ has. Gotit?
The Pete Posts
Below are posts primarily from pinkeyepete2 poster on Yahoo.
(John - your Dad says ... this guy is awesome .... its as
good as you'll *ever* read from a poster on a message board ... anywhere
You and Mike should read his posts .... until you grasp
the subjects he talks to .....)
His posts cover (c) thru (e) above.
He could give a rats ass about (a) thru (b).
The posts are NOT in perfect order because I want to
focus on ...
EARNINGS
ASSETS IN THE GROUD ...
PETE'S POSTS
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EARNINGS
Earnings est. for 2006
by: pinkeyepete2
Long-Term Sentiment: Strong Buy
OK we don't know for sure the production numbers, or the price DEZ gets for their gold.
Going off of Q3 earnings, with $442 oz price, 16,400 oz production.
The company made $1.2 million CD.
This Q the company expects production of 25,000 oz, and going forward it may increase beyond 25,000 per Q, but for the
projection I'll leave it at 25,000 every Q.
The company said it would have a reduction in production costs of $30 to $35 US per OZ when the company ran at full production. I used $30CD for the purpose of my earnings est.
Q4 25,000 oz @ $500 oz..... EPS .07 CD
Q1 25,000 oz @ $540 oz..... EPS .09 CD
Q2 25,000 oz @ $540 oz..... EPS .09 CD
Q3 25,000 oz @ $560 oz..... EPS .10 CD
Q4 25,000 oz @ $580 oz..... EPS .11 CD
Now there may be taxes, and costs I'm not aware of, but to the best I'm able this is what I think DEZ will earn.
Add .01 for every $20 increase in the price of gold to earning.
It looks like .35 cents CD for a 12 month period in Q3 at my projected gold prices.
I really expect to see higher gold prices.
Well with projected growth it's not unreasonable to expect a P/E of 40 that means $14.00 a share, and if DEZ carries a P/E of 60 we are looking at $21.00 a share in Nov.
A P/E of 48 is a more real number for a growing company with increasing profit margin.
So a P/E of 48 gives us $16.80 a share in Nov.
If gold climbs to $600 before the end of the year we are looking at a higher share value.
Now there is a lot of room for error in these projections, and the real earnings could be very different, but with the numbers I have avalible this is my best est.
DEZ&sid=1609110047&mid=6994'>http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1609110047&tid=DEZ&sid=1...
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ASSETS IN THE GROUND
Re: Interesting that all of these upgrad
by: pinkeyepete2
Long-Term Sentiment: Strong Buy 01/18/06 02:18 pm
Msg: 7246 of 7857
I smell FEAR are you playing short, or getting worried about your long position.
Do what you think is right for you. I'm just going to sit on my hands and do nothing. This company is run by the best management in the sector.
Their reserves are excellent with a grade that's high enough to make money at less than $300 a OZ.
The production is growing.
The cost of production is declining.
The reserves continue to grow every Q.
They have over 100 kilometers of claim just starting to be explored.
The plant and equipment are all new, and state of the art.
No major debt., and money in the bank.
First positive profits Q4 2005. The price of gold $100 higher than Q4. Currency hedges in place. The core drilling assay's have had great g AU/T in exploration holes out side the current mine locations. What more do you need to help you decide to hold this stock?
DEZ&sid=1609110047&mid=7246'>http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1609110047&tid=DEZ&sid=1...
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ASSETS IN THE GROUND
The only thing you need to be aware of is the company said it would have good news coming before earning.
How soon I haven't a clue, but when that happens it's going up.
The only news would have to be on "core drilling results" in the Pindobacu, the low Canavieiras discovery in the MU and LU, the area of intrest in the Moto do Vento, or the test area up north in the belt.
I don't expect discovery news from the Serra do Corrego MU or LU, but I've been surprised before.
It all adds up to more reserves infered, and that gives more value to the company.
DEZ&sid=1609110047&mid=7257'>http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1609110047&tid=DEZ&sid=1...
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ASSETS IN THE GROUND
Intresting good news
by: pinkeyepete2
Long-Term Sentiment: Strong Buy 01/18/06 11:27 pm
Msg: 7266 of 7857
I have spend the evening reading over a 60 plus page doc file by DSM (DEZ) on the mine start up back in 2002 when it was a joint venture with JSM I think, during assay and drilling study of the gold belt.
It covers core drilling from AngloAmerican to local pick and shovel mines on the 100k ridge, and locations of study and why.
AngloAmerican saw the gold belt as very simlar to the Witwatersrand basin with quartz pebble conglomerate reefs with native gold (very fine grains), but sold it anyway.
Well the point I'm taking so long to make is gold was $325 at the time, and one of th reefs was considered to low of grade at 1.19 g AU/T to make it profitable to mine at the time, but it was close considering they were mining the one above it.
So extraction cost would be much less.
OK here's the kicker the reef has been drilled many times by diffent owners, and has a consistant grade of 1.19 g AU/T, and in the survey report it runs for 3 kilometers at a thickness of 35m to 45m and contains very large tonage.
At current prices this reef would be very profitable, and add to the proven reserves 2 or 3 million OZ anytime they wish to make it public. It's called the footwall reef, and if anyone in inclined to contact the company, and ask about it please post their response.
DEZ&sid=1609110047&mid=7266'>http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1609110047&tid=DEZ&sid=1...
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EARNINGS
Re: Earnings est. for 2006
by: pinkeyepete2
Long-Term Sentiment: Buy 01/11/06 12:52 pm
Msg: 7015 of 7857
I'm sticking to my $16.80 target stock price for 2006.
I know it's more than 5 times the current price, but everything points to this value by end of year.
DEZ&sid=1609110047&mid=7015'>http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1609110047&tid=DEZ&sid=1...
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EARNINGS
(John - this stock is for Mike. Its a 2007 play
Why?
Caution:
How are they financing this?)
One more stock going up
by: pinkeyepete2 01/13/06 10:52 am
Msg: 7057 of 7857
I'm doing DD about 10 hours a day, and I found another good gold stock going into 2007.
It's a long term hold with a price target of about $7 by the end of 2007.
Could be as high as $4 this year.
(AZK) will start production early next year, and expects 175,000oz yearly production.
Over 1,000,000 oz reserve so far.
AZK looks good to me, but make your own decisions. I bought some AZK this morning. DEZ is still my number 1 pick for 2006.
DEZ&sid=1609110047&mid=7057'>http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1609110047&tid=DEZ&sid=1...
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EARNINGS
Re: Earnings est. 2006 S&P consensus
by: obdctr
Long-Term Sentiment: Strong Buy 01/14/06 04:34 pm
Msg: 7102 of 7857
Judging by the last reports my best guess will be around the 10th of Feb.
The runup into the release will be better than the release. I expect a full year loss of 3 to 4 cents. This last qtr. will show 3 to 5 cent gain. This is the gain per qtr. for 06 that is expected. As the pog rises they could get better. Time will tell.
Good Luck, Obdctr
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EARNINGS
With the first positive earnings expected, and ramped up production for the first time.
Plus new data from core drilling in the lower Calavieiras MU and LU discovery zones, and news from core drilling in the Pindobacu.
Toss in some possible news from the northern 100 kilometer area where the company is looking for more entry points.
Add to this production cost reductions from working at full capacity.
Plus a positive earnings estimate for the next Q, and I think you come as close to a perfect storm to the up side as your going to see.
If your a day trader step out of the stock for earnings.
If your in a long position don't worry about it. You could miss the biggest one day gain of the year by going to the side lines.
If it does pull back I doubt it would pull back to todays price, or even close. So you'll still be ahead.
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EARNINGS
Re: Pinkeyepete2...
by: obdctr
Long-Term Sentiment: Strong Buy 01/14/06 08:54 pm
Msg: 7107 of 7857
Current net cash value of the company is 1.00.
Assets less liab is 85 mill, including 50 mill for minerals and property which is low considering they estimated 3 million oz in reserves.
These reserves cut in half and valued at 525.00 less mining and admin cost is 325 million
If you take a 12 cent full year earnings projection times a 29.5 multiple you end up with a forward looking price at the current price of gold at 4.10.
Most of the miners carry a multiple of 50 or higher so if one were to use this multiple the price would be around 8.00.
DEZ reported earnings for the first time last qtr which produced a loss of 1 cent.
They held 2500 oz of gold already produced and some ore not processed. That should help with the next earnings release. Had they released that gold they would have been in the black.
With all that said the market did not react to their last earnings release.
It will take good news and a large spike in gold to get this to 6.00 before the next release.
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EARNINGS
Re: Pinkeyepete2...
by: pinkeyepete2 01/14/06 09:35 pm
Msg: 7109 of 7857
Yo baby doc I see your paying attention. Did you factor in that they sold their gold at $442 a oz last Q, and that they were operating at 70% production.
Management said once they were operating at full production the cost per oz would be reduced by $30 to $35 US.
It all adds up. Play the stock how you see it, and don't hold if you can't sleep.
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EARNINGS
Re: Pinkeyepete2...
by: pinkeyepete2
Long-Term Sentiment: Strong Buy 01/15/06 07:00 pm
Msg: 7121 of 7857
Well we,re not far apart on predicted earnings for 2006. I came up with .39 cents CD. The way things are starting to look we are both going to be low. I had Q3 at $560 oz, and Q4 at $580 oz. Q1 and Q2 at $540 oz. With every $20 increase in the price of gold you can add .01 to each Q earnings estimate. At the current price of $555, Q1 and 2 have gained 3/4 of a penny each.
DEZ&sid=1609110047&mid=7121'>http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1609110047&tid=DEZ&sid=1...
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Theres more ... its late .... and there's time ..
Test:
What is the dollar really worth?
What is an ounce of gold really worth?
love,
Dad |
