Greetings again!
This note crossed the Stockman Forum today:
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LS,
If you're interested in CVR, the little Canadian company with
a 3.2 mil stock cap, a half million stock float, and a $72 NET book value per share minimum, lots of exciting things happened over the week.
1) A little bit of exposure through some internet stock forums and a
CVR press release concerning the significant undervaluing of this company's stock as compared to known assets helped move the price from 2.30 to a high of 2.90 this week, a 26% gain, before some profit taking on Friday took it back to 2.75.
CVR's press release confirmed the scandium and nickel assets at the
Washington state property and actually valued them higher than referenced before. In addition, they confirmed that a great deal of iron also exists at the site.
2) Crews are lined up for the startup of the Durango mine either the
third or fourth week of October. The mine will be producing gold from day one producing an income of 2.8 million net per year. Typical producing mining companies have P/E ratios that range form 10 to 30 times earnings. When the mine starts, the company will have a 1.14 EPS (U.S.) minimum, and a 1.68 PE (U.S.) minimum.
One question raised this past week was whether the 1.14 EPS was in
reference to the contribution of the Durango mine itself or reflective of the entire CVR financial situation. The answer, according to CVR, is that it is reflective of the entire CVR organization. They do not have a lot of overhead and they anticipate a great deal of cash flowing into the company from not only the mine, but also from joint venture arrangements they make. The EPS could actually be much higher from some of these joint ventures.
Fund managers will love to get on board CVR once they are producing.
They are already contacting CVR from both North America and Europe.
3) The top geologist (VP) of a major Vancouver mining company and
the top geologist (VP) of CVR, Dr. Richard Kucera, walked and assessed the Washington State property's scandium and nickel reserves yesterday (Friday). Both companies are hoping that a profitable business relationship can be established. These are the guys who make the recommendation to their respective boards about whether to proceed or not - they are not there doing grunt work, that's already done. VP's make deals.
The size and magnitude of the potential deal is awesome when one
considers that CVR has proven scandium and nickel reserves of:
Nickel 1,000,000 tons (valued at $65/ton) = 65,000,000 asset
Scandium 800,000 tons (1.2%) = 960,000 proven ounces
Current Value depending on grade is $250-800/oz
960,000 oz * $250 (worst case) = $240,000,000 asset
5) A large Canadian midwest brokerage firm specializing in mining
has contacted CVR after reading about CVR on the internet. Their question was, "are you guys for real?". The brokerage firm wants to formally check out CVR and have their in house geologist confirm the scandium/nickel reserve and the gold mine in Mexico. They told CVR that their clients love undiscovered and undervalued mining companies and will aggressively buy stock all the way up to a typical producing mining company P/E if their geologist confirms their reserves actually exist.
If my calculations are correct, that could be to a level of $30 per
stock.
6) Another deal is in the works that will provide over 5 million
dollars in cash/profit. Can't talk about that right now without hurting the negotiations, but that deal should close next week.
CVR has a ton of potential to really grow shareholder value. It
just needs exposure concerning its proven reserves. In the coming weeks you will see a lot of news as it completes closing the business deals it is presently and very quietly negotiating. Call them. They will tell you more than I can write about.
CONSOLIDATED VISCOUNT RESOURCES LTD
Leonard J. Harris
President
The Marine Building
830-355 Burrand Street
Vancouver, B.C. V6C 2 G8
(604) 488-0133
1-800-665-9404
(604) 669-5715 (FAX)
Ask for their investment packet.
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Mostly a rehash of what we already knew. No info on the author, so I can't comment on his track record. Right now, $30.00 per share is hype, but we can dream a little. The first step is to get into production, so a positive cash flow can fund other projects. CVR appears to be ready to make that first step.
Mike R. |
