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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: semi_infinite who wrote (19855)	1/11/2005 5:59:20 AM
From: croesus1111	Read Replies (1) \| Respond to of 108633

Re the PE for RANGY, and its relationship to GOLD, "Randgold & Exploration Company Limited, through the activities of certain members of the Randgold Group, is engaged in the exploration, development and mining of gold deposits from African countries outside of Randblock. For the fiscal year ended 12/31/03, revenues increased 97% to $3.2M. Net income rose 32% to $36.2M. Results reflect the extension of long-term loans and a $33.2M profit on disposal of portion of investment in associate." from Reuters. So the PE appears to be mostly an anomaly, due to a one time sale, that would account for 33 out of $36 million in profit. I am not clear on the relationship to GOLD; they both appear to be major subsidiaries of the Randgold Group, but I am not sure. The revenue number in the above Reuters paragraph appears to be incorrect. The profit number appears correct based on 44.35 million shares outstanding and $0.748 per share in earnings. The price crash in this stock is an illusion because of a three for one split in May of '04. I'd appreciate reading what you find out in your research, as well as your conclusions.

To: semi_infinite who wrote (19855)	1/14/2005 2:54:54 PM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 108633

semi_infinite re: GOLD & RANGY relationships....So African Golds. RANGY is controlled by Roger Kebble, son of Brett Kebble...controversial, oft' larger than life South African Gold Family - J.R. Ewing-esque comparisons may be drawn to their ongoing real-life soap opera headlines....and it is perceived as a plus in the marketplace that GOLD is separating itself from RANGY and Kebble influence. RANGY is really a HIGH leverage/HIGH risk - but, ULTRAHigh potential reward vehicle for broad speculation/investment in other companies & assets. RANGY/Randgold & Exploration has recently sold down it's interest in GOLD/Randgold (easy to confuse the two name-wise) from a 43% near controlling interest... down to somewhere around only 7% today - lately in conjunction with a series of complex financial arrangements and importantly used that money to pay down some of its own debt and to increase it's leverage via expanded investment in other companies Gold, Platinum & Diamond Mines and a substantial increased investment in a goldminer, that is also a URANIUM play - AFLEASE/Afrikander Lease(AFL.JSE) - a So African Gold Miner with huge Uranium holdings (1/2 of all of South Africa's easily recoverable Uranium) that I added to with my other So African Gold re-entries here of late because of my high future expectations for a major upcycle in Uranium....Aflease is highly speculative - not a core mom & pop gold, or commodity holding fwiw. * Aflease is up about +50% this week by the way <VBG> mineweb.net Kebble bought Aflease shares (it has pulled back from $5/$6)starting around $3.25 for his first tranche, then $2.50 for his 2nd with the proceeds from his GOLD sales.... it pulled back to near $1 has run thru $2.50+ once again. Due to the balance sheet - this companies longterm viability "had" always been at question as a gold play... now it is being re-discovered for really being a Uranium play and with the new financing injections...is an interesting speculative longterm value/Uranium Commodity play with the Gold kicker....that we had the ability to buy into - significantly cheaper than Kebble did with his Randgold/GOLD stock sale proceeds. Always nice to get in at a significant discount to a major Industry player offloading core assets to buy what he views as a significantly undervalued asset play ~ - more on URANIUM later...interesting topic if anyone has any interest/comments on Uranium/indiv plays... ie: Cameco/CCJ a 5 bagger over 2 years - has been a big Uranium winner of late etc. ...back to RANGY - it has large holdings in AngloPlatinum, DROOY, Harmony, JCI (another highly levered Kebble investment vehicle), Western Area's - another very interesting, high leverage/risk play on the Mega-Monster South Deep GoldMine and has interests in Aflease,Ansolian Diamond Mines...a basket from gold to platinum, diamonds to uranium...that any hard asset/commodity player should find interesting as a speculative flyer in a commodity upcycle. If that is not confusing enough; there is also "JCI" another Kebble investment vehicle, that owns around 25% of RANGY and 50% of Western Area's - the South Deep, Monster Gold Mine play with Placer Dome. I own a basket of all of these plays... they run the gamut, from "somewhat" conservative plays like GFI, or GOLD, to highly levered/higher geared plays like HMY & DROOY, to the "option-esque" emerging asset/investment vehicle plays like Aflease, JCI, Western Areas & RANGY. You just need to weight the basket to one's individual risk to reward/speculative tolerance. If you just want some South African Gold, or non-No American exposure... Goldfields/GFI & Randgold/GOLD are probably good calls (remember GOLD's producing assets are in Mali - less political/currency risk etc)... if you want more "leverage", but don't want to speculate on emerging companies/asset plays - then HMY & DROOY are appropriate...and if you want to add some "potential" elephantine upside (with accompaning risk) - buy some RANGY, or AFL/Aflease, Western Area's etc - at today's "option" prices... and think of them as a 5 year "LEAP's" - and throw them in the drawer for 5/10 years and forget about them ! In a nutshell: RANGY is a high risk/high leverage investment vehicle/option on Gold & Precious metals & minerals - while GOLD/Randgold is a producer, looking to buy/develop & explore additional properties. The Market likes GOLD/Randgolds CEO Mark Bristow... straight shooter who has publically said he will NOT dilute shareholders - a big weakness in So African golds... and quite interestingly enough - GOLD/Randgold does NOT have any South African Properties...something few realize. The criticism of GOLD has been that it was a one mine - now two mine story; without any real track record of initial exploration success - all though; the model led by Harmony Gold's CEO Bernard Swanepoel of rolling up buying/developing assets spun off by others - is not really any different than what we see in the No American E&P sector... so I don't put too much stock in the criticism's of Bristow & Randgold/GOLD's lack of major exploration expertise/success and do own it - one reason, is that while they share the HMY model... HMY has been a "serial-diluter" and GOLD's CEO Bristow - vow's to use debt vs. equity and to use it in moderation... also; something (moderation) not usually found in abundance with SA Golds (vbg) and you don't have the currency/political risk with GOLD/Randgold that you do with the pure South African plays...but, you give up some upside for that protection as well. Presently GOLD's main asset is the "Morila the Gorilla" Mine in Mali...and Loulo - just coming to production. They've also received some criticism for hedging... albeit @ $430 per oz for something like 300,000 oz - if I recall, in conjunction with short-term debt financing - once again, vs. stock dilution....and "short-term" being the key word. Hedging may become an even more interesting subject in both the Energy & Precious Metals markets here real soon - given historic prices in some area's. You can & may have to hedge "some" production to obtain short-term financing to develop/acquire assets and that may be a significant advantage to investors versus equity issuance/dilution to shareholders. In a nutshell; I think the market very much likes Randgold/GOLD's CEO Bristow... and his E&P style model can thrive in Gold ala Harmony's... when you buy, develop, budget and manage correctly. I think GOLD is & will continue to become an institutional fav' based upon their debt in moderation vs. equity dilution model... and strong management. RANGY; I also own; for quite opposite reasons of GOLD. RANGY is now down from $6 to around $1.70... I bought it as an "option without an expiration date" type of play....with it's ultra-leverage. My re-entry back into Goldstocks being more weighted right here/right now to the So African Golds vs. No American's... is not blinded by the balance sheet, political, or currency risk fundamentals... it's quite simply that imho; those negative's have been over-priced into the So African's... and the currency play factor (the uber-Strong Rand vs. Weak US Dollar)has become a trade that is now somewhat imbalanced and I'll take the other side... for now. If the USD countertrend rallies here - So African's can ramp profitability up - while POG actually retraces and No American Gold's sell off. If the USD keeps sinking... the South African's are adjusting to the Rand/USD relationship, cutting costs, putting mines on maintenance, exploring spinoffs/tracking stock's etc. The So African's presently have become a contrarian play within a traditionally contrarian sector. There is major political pressure within South Africa to change it's monetary policy; which led to a "too Strong Rand" - that was also pushed higher & stronger by the players in the currency markets. South Africa can not and will not; let it's commodity-driven currency... destory the underlying commodity industries. This at some point is a self-correcting mechanism that is when, not if... and the hot money which also is a when, not if factor.. is already starting to pull off the Long Rand/Short USD play... and will find another home soon enough - easing the Rand. Many of the South African Goldstocks like DROOY are again priced as in a $300 POG environment due to the currency/exchange issue's. DROOY as I mentioned earlier; has some downside protection via the ability to spin off non-So African producing assets that carry value today, equal to the present shareprice/market cap; with the market in essence now potentially giving shareholders - the African assets for free. - I'll take that bet. You don't have to time the exact bottom in the So African Golds here either...My thinking is to simplistically buy weakness & average in slowly: For DROOY initial 1st 1/3rd re-entry at $1.25-$1.50 here....can set stops as needed and another entry at .80c-$1.00 if/when seen and the final 3rd with held - should we ultimately see the alltime $250-esque POG lows of .50/.60c again... at which time I will be so happy, that I'll jump up and ki$$ my own A$$...on that note; as far as a "bottom" - at those prices you can afford to sit & hold thru an ongoing cycle's ups & downs - given the leverage/gearing that the South African Golds have. Many here on this thread have already hopefully extracted significant profits from this cycle and have pocketed them...but,on the subject of the "perfect" call with not so perfect timing; will remembera few years ago when XTO's CEO Bob Simpson was pounding the table for an energy "bottom" and very controversially buying a portfolio of other E&P stocks back when Nat Gas was trading at $1.80-$2.50ish mcf- saying he could buy them cheaper than producing gas/investing in his own company.The stocks went much, much lower intially... but,ultimately his reasoning & value call was "perfect"...even if his timing was not. The why is oft' more important than the when... Ala` Simpsons E&P play; within some of the So African Gold's we are are starting to get cheap enough... that being right on the "when" is not the upside leverage... being right on the "why"(when no one else is) - is. Good Luck