AT LONG LAST!
Have you ever worked on a project that just seemed to never end? Projects that give one the feeling of taking two steps back for every one step forward. Unending patience and perseverance are absolute prerequisites in bringing a successful conclusion to projects of this nature.
And then, you finally reach a point in the project where you just know the worst is behind you. It is like a light bulb turning on and putting an end to the uncertainties and darkness. At this point things become “Crystal Clear!”
Well folks, we have just crossed that threshold with Adanac Molybdenum Corp. Larry Reaugh, Mike MacLeod and their whole team are about to reward shareholders with their long awaited returns.
For years these highly skilled gentlemen have pursued their goal of putting Ruby Creek into production. For years they have done so with very small fanfare and appreciation for their hard work and gigantic accomplishments.
The world is in the process of recognizing that Larry Reaugh is one of the foremost experts in the world on the molybdenum market and that everything he has said over the last three years is coming true just like he said it would.
I have repeatedly said Larry is easily the best I have had a chance to work with in my 25 years of being associated with Vancouver and Venture Exchange markets. It pleases me to no end seeing the molybdenum stocks explode in the markets as being the sector of choice.
Rising moly prices in the face of worldwide economic uncertainties can only mean one thing. For the past 18 months end users of moly have voiced their concerns about the potential for a shortage of supply to meet the growing demands in 2008-2009. In my opinion the moly sector is beginning to recognize the lack of supply coming online and investors are positioning themselves for a run that could exceed those of the uranium stocks.
The inevitable end result to this search for new production will lead to only one company. You got it ADANAC MOLYBDENUM CORP. AUA AND AUAYF.
Make no mistake of the fact that those who are true experts and dead serious about bringing new moly production to the market know the fact from the fiction. They know that Ruby Creek is well ahead of any other MAJOR moly project slated to come online. They have separated the hopeful’s from the real thing and that is why they are working with Mike and Larry in getting Ruby Creek financed and into production.
There are a lot of things being written and said about many companies who would like you to believe their projects are economically viable. Projects offering huge in ground reserves where billions in profits are just waiting to be shared with those who fall prey to their ramblings. I would love to expose these companies for what they truly are but I am not going to lower myself to comment on the foolishness of the things that are being said. I only hope that those who have been sucked in by these people have an opportunity to see the light of day before it is too late to protect themselves.
A very easy way to uncover fact from fiction is to visit the websites of each of these companies and see just how much work has been done on the projects. Before you go to their websites I invite you to go to Adanac’s website and read of all the work and money that has been spent to bring Ruby Creek to its current point of development. You will find that many of these so called projects have spent very little money on anything other than promoting themselves to the investor as the next “big thing” in the moly industry! Most of these companies do not even have feasibility studies to back up their bold statements. Until they can produce a bankable feasibility study all they have is hot air. I feel sorry for those who have fallen prey to “cheap talk!”
This update is being written for three reasons.
THE FIRST REASON:
The first reason is to let each of you shareholders of Adanac Molybdenum Corp. know what my personal stance is on Aua and what I expect to see happen in the future.
I have had many calls from Shareholders asking if this would be a good time to take profits in Aua and buy more Goldrea Resources; Gor and Goraf. The answers to that question are no and yes. No to taking profits on Aua and yes to building the Gor position. Gor also is the second reason for this update which I will get into in a few paragraphs.
Remember, these are my opinions and this is exactly what I am doing with my own shares. I have never sold a share of Aua or Gor and I have no intentions of selling at prices anywhere near these levels.
I believe the whole world is about to be introduced to the molybdenum market and Aua is the cream that is going to rise to the top of the moly sector. For two years I have written about this company and I believe that everything I have written about Aua is taking place right now. I personally believe permits and financing are a foregone conclusion. I believe permits could begin flowing in at any given point in time and the major financing could be put together within the next six months.
As shareholders, in my opinion, I believe all we have to do is “SIT BACK AND ENJOY THE RIDE! That’s right folks! I believe the light has come on and the whole world is about to recognize what you and I already know. What we know is that Ruby Creek is going to become a reality.
If my thinking is correct good times are just around the corner. We must recognize the road to production is a very frustrating and time consuming journey. The best part to this whole picture is that I believe the most difficult times are behind us. Yeah, I feel real good right now. For the last 1 1/2 months I could sense that things were changing and a different ballgame was about to be played. This new ballgame is a win win situation.
Thirty years of investment experience has taught me that the greatest profits made for investors are made by identifying companies who have a future and then seeing the management of these companies successfully develop these projects. Very few companies have the necessary combination of management coupled with an economically viable project. Without a doubt Adanac has both and as investors we are on the cusp of seeing the whole world recognize this as well.
The last thing I want to do is allow any of my shares to be sold where over the next year I would look back and think about the lost profits I could have had if I would have just held on to my stock. We have all sold stock in the past where we have looked back with 20-20 hindsight and recognized that we left way more on the table than we took off. The basic reason I have found my way to investments like Aua is because of the multiple returns on my investment if a company develops into what management believes its potential is.
I personally believe the time will come where I do not have to make a decision to sell my shares as I believe Aua will wind up being acquired by another company.
I think the next two months for Adanac Molybdenum shareholders are going to be very rewarding and the absolute last thing I want to do is let any of my shares go for prices that I think are dirt cheap.
THE SECOND REASON:
The second reason for writing this update is to make each of you fully aware of the fact that everything I have said about Aua also applies to Goldrea Resources.
Promotionally Gor has had to take a backseat to Aua and that is absolutely fine with me. I have had plenty of time to build a position in Gor that will change my financial future forever as Larry continues to bring value to the shareholders.
Many investors seem to be a little confused when looking at Gor. Some believe the value of this company is on hold until the buyout of the Daye Mines is totally complete. This could not be further from the truth.
Every day that passes is a day that brings us one step closer to the completion of the 800 ft shaft that is in the process of being completed. At this point in time the shaft has roughly 120 ft to go to get to total depth. If all continues as planned this shaft could be at total depth sometime in May. Once the shaft is complete Gor could be taking gold out of the ground in roughly 2 months. That’s right folks, Gor should be in production in late summer or early fall.
This process is totally separate from the buyout of the Daye Mines. The buyout of the Daye Mines puts the whole package together, including ownership of the 1750 t/day mill.
I personally view the delay in closing on the purchase as a positive development for Gor. The reason for this is very simple. Once we close on the purchase Gor will then be required to make a deposit with the balance due in a stipulated period of time. Every day that passes without finalization of the buyout puts us one step closer to production which gives Gor a much stronger financial footing.
Everything dealing with the purchase of the Daye Mines has been agreed upon except the amount of the deposit and the timeframe of the remaining payments. From my understanding the Chinese Federal Govt. would like to have 30% down with the balance paid off over the next year.
As in Aua, Larry has surrounded himself in Gor with an excellent and very well qualified management team. Richard Shao PEng., Norm Tribe PEng., Paul Blair COO and Director, Hugh Squire PEng.and Director, John Chapman PEng. and Director, Jonathon Lin CA and CFO and a host of others are working on a daily basis to bring Gor into timely production. So please, do not be confused in thinking that Gor is standing still and going nowhere while we wait on the completion of the purchase and playing second fiddle to Aua.
The time is rapidly approaching when the spotlight will shine brightly on Gor and I think you will be real surprised at the price appreciation of Gor between now and then. I think those who failed to understand just how undervalued Gor is at these levels will look back and regret not having taken a closer look at everything Gor has going on today.
I also believe the success of Aua is one heck of an ace to have in the hole when it comes to Gor. As investors take profits out of Aua it is easy to see how that money will find its way into Gor. Not only that but the shareholder structure of Gor is a whole lot less complicated than that of Aua. I believe any significant buying that comes into Gor will move the stock up significantly.
I am a goldbug by nature and as a result I believe gold companies that are soon to enter the world of production are as timely an investment as an investor could want. I believe the day will come where the physical gold market will be shut down for the lack of physical gold to sell to meet the growing demand. At this point in time I believe gold stocks will explode as they will be the only game left in town. I believe the day will come in the next three years where the potential exists for stocks like Gor, as they continue to deliver on their business plans, have daily trading ranges where the spread between the daily highs and lows will give an individual returns on his capital in the range of 50%-100% from today’s prices.
THE THIRD REASON:
A COMMENT ON PRIVATE PLACEMENTS:
GOR PRIVATE PLACEMENT IS OUT NOW:
The recent announcements of the “bought” Private Placements in Aua is very good news for shareholders. The term “bought” is used to signify that the placement has already been sold out and the funds guaranteed. The bad news to this is the fact that the public will not be allowed to participate. I think it is safe to assume that the public will not have a chance to participate in another placement with Aua. The “Big Boys” have arrived and it is now their ballgame.
I wrote in my last update on Aua that the funds and institutions have failed to step up to the plate with Larry Reaugh’s companies. I am very pleased to say that is no longer the case. With the newly found enthusiasm in molybdenum coupled with the recognition of Aua as the next major moly mine to come into production I believe funds and institutions will find Aua a very good place to call home for their investment capital.
THE GOOD NEWS:
The good news to this is the fact that Goldrea Resources will have a Private Placement coming very soon, as in right now, and for those who qualify and want to participate I will be able to get you onboard. There is big outside interest in this placement and Larry is making sure that those who have been involved with the company in the past have first crack at purchasing what they want. It is important for those with an interest to e-mail me or call me as soon as possible with your level of interest.
I believe the time will soon come where the public will be locked out of any future placements with Gor as I expect the same thing to develop with Gor that has happened to Aua. It is very difficult to argue when management is approached by parties guaranteeing funds necessary to move the company to the next level.
The pricing of the PP is expected to be between $.60-$.65 Can. with a ½ warrant for two years priced between $.75-$.80.
mhoy@neb.rr.com
402-483-4484
Mike
The opinions expressed in this article are those of Mike Hoy and not to be construed as investment advice. It is up to each of you to do your own due diligence as your opinion and investment objectives may differ from mine. Anyone with any questions can reach me at the phone number above. To be removed from my e-mail list simply e-mail me at the address above and ask to be removed. |
