Thanks for your response to my Aggregate questions, Bill. More "off balance sheet" mining accounting loopholes I see. Kind of like hedging/options accounting is off balance sheet, too, in a lot of these mines now howling in pain at their current state of margin woes.
Fascinating.
As in many other instances, I will keep your reply and add it to the many things I learn about this business as I go file on my hard drive that is simply named: BILLSEZ.txt
RE: your last question:
To what degree is that mine a full commercial operation that runs all year regardless
of the tourists that stop by?
Mr. Valentine, like many others, has shut in his most profitable properties, especially hardrock with high reserves due to the low price of gold. He also, like many others all over the world has been using this period of POG discouragement to continue to upgrade his portfolio of properties to take advantage excellent mines for low prices. He opened an RV park in the front of the land next to the freeway to supplement his acquisition and wait game plan two years ago.
The commercial mining season around Baker at this elevation is from Late April to Mid October, Bill. Therefore, the excavation portion of this commercial Blue Bucket Gold Diggings Mine is getting ready to close down for winter. HOWEVER, as you well know, Roy is no different than any other outfit: he has stockpiled ore to continue process during the winter months. As to the size of some of the serious equipment he operates, a busy 50T per day current capacity ballmill crusher kept humming is just one of his toys on one of his hardrock ops.
If you stop and think about it from my perspective, Bill, Roy has pretty much done the opposite of the "big boys" during this low POG time: THEY went to highgrading their own reserves inorder to drop op/costs and stay profitable. Roy SHUT IN HIS high grade properties and just mined Blue Bucket and one other property during the last 10 seasons in order to wait out this price manipulation seige, conserve operating cash, and add more high quality mines to his property portfolio at fire-sale prices from busted mining companies here in a 4 county area.
Frankly, him bucking the trend to hi-grade and just mine enough to keep a skeleton crew busy and do what was necessary to be ready for the return of POG to more reasonable levels impressed me! Now, he's sitting pretty, and I'm learning a helluva lot about how do deal with my recently acquired properties "by osmosis", extremely fortunate to have him as my gold coach, AND gold has finally broken the 20 year downturn if current POG is sustained and built upon. Life is Good!
I know I'm good as a webmaster, but it was nip and tuck engineering the POG rally to coincide with Roy's cybermining/onsite mining extravaganza venture with the public this past weekend. DAMN, I'M GOOD!
The little guy/commercial mining operation guy really CAN make it if they are, as Valentine says "willing to eat beans" until things turn around. BGO had to learn the same lesson except with OPM when the dumped the company jet bit a while back if memory serves me. And so it goes, eh?
So, as soon as Roy gets the pump lines blown clear, he'll be turning off the pumps and shifting the operational focus to the stockpiled ore and indoor processing about 5 miles away where he has a different equipment set up, his winter set up he calls it.
And my education will continue. Today's agenda at Blue Bucket is equipment mod of a centrifigal jig for fines recovery for thorough testing this winter before putting into service on site next spring. Having seen how well his mods to the Australian Spirals works and how it feeds his Welfley, well, Bill, I'm quite excited to see what he's got in mind for that jig!
And as I watch him cherrypick distressed mining properties, I know the rash of mergers between the strong and the weak is just now getting underway. It should be a lively 80 days until y2k puts the crimp in the big boys and their ability to do the M&A paperwork in a timely manner.
Out here, as in the world of farming, deals are made on handshake, and the deeds promptly recorded at the county. Simple stuff. But the PDG, ABX, NEM, Agnico Eagle types are going to be all balled up in knots due to electronically powered communications snafus out the ying-yang in just 80 days, thanks to Y2K. While I know this is a point you and I disagree on, I can't fault the handshake deals that has the little commercial miner outfit can be nimble enough to capitalize upon.
But, one piece of my investment philosophy has changed in the 5 months I was gone off of SI and re-arranging my life and that of my family due to our Y2K prepared and preparing mindset.
And that change is this:
No longer do I have as part of my Y2K game plan buying ABX and holding it for the direct to the bottom line gold rally benefit directly ahead due to Y2K.
Those who have heard me say prior to now, that I'm going to load up on ABX prior to Y2K induced headaches and resultant spike in POG, need to pay attention to MY POSITIONAL CHANGE toward ABX in my own personal portfolio asset allocation.
Instead I've taken a leaf out of Valentine's mining gamebook: buy the gold property (or claim) outright and wait it out the Y2K changeover as well as the Gold Sector Recovery in its infant stages. POG will rally.
Or to use otherwords, instead of a "let ABX do it" and I vicariously benefit as an equity shareholder, I'm doing it, myself and am now letting Barrick swing in the hedgebook/y2k breeze.
Regards,
O/49r |
