Hi All,
I'm going to be posting about Corona Gold CRG on this forum. The best way to start is just to re-post something I wrote and posted last weekend, when I was not aware of this CRG forum. That there hadn't been any CRG posts on the SI forum since summer of 2010 is no surprise. CRG has a real promotions problem, as in no IR, no one to answer the phone (they do have an answering machine), no coverage and no website! But before you go onto the next one, keep in mind that this stock is headed by Ned Goodman of the Dundee group, the same Ned that sold Dundee Wealth to Scotia in Nov 2010 for $3.2 Billion. Turns out that wealth mgt is ok but Ned is actually a trained geologist, he's assembled a great technical team and Corona Gold is directly benefitting from the Dundee association - and the latter is one heck of an understatement. One day, it could be 3 weeks, 3 quarters or (I doubt) 3 years Ned will bring this company to life and these days of peanuts for market cap will be long, long gone.
From: 31Floors 3/11/2011 1:44:36 AM
1 Recommendation Read Replies (1) of 71069
Hi All,
I think CRG is one of those truly unique microcaps - a gold microcap that is (dare I say) very safe and yet has exceptional upside potential. My goodness who knows what could happen if management ever decides to get a website or hire someone to answer the phone?? Until then, astute investors will buy it quietly knowing full well, its time will come. In the meantime it is simply an exceptional value. No website and no one to answer the phone?? No worries, management is not by name of Madoff, but rather Ned Goodman and Dundee.
The more I look at Claude's recommendation, Corona Gold, the more I like it. After today's sell off, it's trading at $1.24 x 18.9m = $23.5million cap. (21.5m shares FD). Years ago, it used to be an operating company but in recent years, management has been working on selling its properties or doing transactions to end up with equity investments.
That's how it got its 6.6m shares of Ryan Gold and .8 million wts of RYG (exercise price $1.15) for the grand total cost of $2.1m (see below). They own 5m shares of Treasury Metals as part of liquidating another property. They own 1.574 m shares of Sabina when their astute mgt team had them buy these shares at $1.27/share in Dec 09. Those same SBB shares are worth 1.574m x $5.96 = $9.4m today for a paper profit of $7.4m after 14.5 months. :)
At Sept 30 '10 and assuming no changes from the investment portfolio, I see:
Cash 12.9m (.68 share)
Other assets, net (.9)m (.05 share)
Investments:
Ryan Gold 6.6m x $2.05 =13.5m
Sabina SBB 1.57m x $5.96 = 9.4m
Treasury TML 5.0m x $1.43 = 7.1m
Harte HRT 3.4m x $.40 =1.4m
Odyssey ODX 2.0m x .23 = .46m
Total investments alone total $31.9m market value; or $31.9m- 23.5m mkt cap =$8.4m discount. That's an $8.4m/$31.9 = 26% discount to the value of the investments (put another way the investments alone are worth an impressive $1.69 per share - that calls for 2 x :) = makings of a very happy camper.
So what's the Total discount to market cap? Try $8.4m for the shares above + $12.9m cash - .9m for misc 'other balance sheet items' = $20.4m (er did I mention the market cap? :)
If you want to look at it from an optimists' standpoint you could assume those RYG warrants aren't going to expire to nothing, those RYG warrants are worth a cool $.72m today, net of exercise price. They will pick up another cool $2.5m 'when' Harte completes their buy in on another property. And that is what I call "fun with numbers". |
