Golden Phoenix Minerals: A Company Flashing Ahead at Warp Speed While Mr. Market Perceives them on a Tricyle
GPXM — OTC/BB
golden-phoenix.com
By D.Stewart Armstrong
March 1, 2008
Ladies and Gentlemen:
Here is the deal in a nutshell. Golden Phoenix is trading at around $.25 US and I think we have to ask ourselves if this is indeed a realistic valuation for this company. In my opinion, the answer is an unqualified no!
I want to get all the “good stuff” in here at the beginning so you don’t miss it. So first off, how can one not be impressed by the quality of information that is disseminated on the GPXM website. Please take special note of the Press Releases. When we combine that quality of information with our continued patience, I think we have “a winner” that will gain momentum when this company hits a certain critical mass.
Listen, I know that we all want it, and we want it now, (just like the lyrics in the song) but that is not how these quality junior mining companies unfold. Quality companies will build from the ground up, and after years of a certain status quo; they eventually hit that critical mass and then the share price will explode exponentially upwards.
So often, investors will pick up on companies and will patiently ride them for years only to jump off at the exact wrong time. We’ve all done exactly that, including yours truly.
I am here to tell you that Golden Phoenix deserves your continued patience.
Take Your Pick of these Headlines
I am going to offer up several headlines for today’s comments on Golden Phoenix Minerals. I would like you to choose the headline that “floats your boat!” I can’t be certain but I think that “float your boat” is an esoteric technical term; but regardless of technical jargon here goes:
“Golden Phoenix ready to move Sparkling new drill rig to Mineral Ridge Gold Property”*
“GPXM anticipates commencement of Exploration on their Mineral Ridge Gold Property”
“Production at Ashdown Continues to Expand in Quantity while Improving in Quality”
Ashdown Molybdenum Shipments continue to increase Positive Cash Flow”
“Golden Phoenix Continues to Perform on all its Promises!”
“Golden Phoenix is Anticipating a 43-101 on Ashdown in the near Future”
“Golden Phoenix and its JV partner Win-Eldridge, work together efficiently”
“Golden Phoenix looks to the future via the TSX”
* (The rig is mounted on a Peterbuilt 367 truck chassis. It features a 600 HP Cummins ISX engine, 1070/350 I-R HR 2.5 air compressor, six rod carousel for 4.5 x 20' x 2 7/8? IF, 35 gpm FMC water injection pump and sand reel with 1,000 feet of 3/8? line. Mmm-Mmm Good!—Powerful comes to mind)
Any one of these headlines could be the basis for an article and they are all exciting and filled with promise. They also happen to be true! I will touch very lightly on the essence of each one of them during these comments. But first of all I want to give you a little encouragement, a little extra motivation to hold on during these tough times when most of these junior mining companies appear to be suffering (not just Golden Phoenix). I say appear because you just can’t judge a book by its cover and there are many times when the market really is wrong. This goes with the idea of being a contrarian investor and doing your homework. I’ve said this before and I’ll say it again—don’t be a lemming! You cannot seriously consider the above headlines, believe them, and somehow feel GPXM will not evolve.
In general, one of the battles in which we are currently involved is simply Main street versus Wall Street. GPXM is not Wall Street. It is YOUR STREET and if you want to get somewhere and you don’t have to be there tomorrow, your wait will be well rewarded. Again, it takes time to build a real company. We are right on the sector, right on the timing, and right on the management. Furthermore, this company is going back to its roots in a WOW kind of way—it’s going back to Gold!
I work for the company and have been doing so officially for about four months. Pure and simple, I could not be happier to be going back to the future.
A Bad Time to Throw in the Towel
Some of you have been persevering with this company for a very long time and are at the point of throwing in the towel because nothing seems to be happening. Nothing could be further from the truth. The share price doesn’t seem to be able to bounce off these levels and that can be frustrating to shareholders.
But what is that old adage about getting rich? Well, there are many, ‘tis true; but one is to buy when there is “blood in the streets”—a ghastly image indeed. But we can also rephrase it to say—buy when everyone is looking the other way! America is being torn asunder by those who would play upon your fears and your common sense. To make matters worse, they’ve destroyed our currency and this is before the real inflation numbers have even remotely linked to reality. This is before adjustable mortgages are due to reset. Ladies and Gentlemen, there is an opportunity here and I for one am not going to let it slip away based on Wall Street Gimmicks and CNBC Talking Heads. GPXM has it right. They have molybdenum, gold, silver, and eventually it is in their business plan to acquire additional gold properties, and they have cash flow via Ashdown.
Now they have the most valuable commodity of all—they have EXPERIENCE! Do not be a lemming.
In cases like this, and based upon past experiences, we all know what happens—especially to lemmings? And is it not true that we have a propensity to throw in the towel at the exact bottom? We’ve all done it; we just don’t want to do it now with this particular company. I have a strong feeling we are at the bottom, both in terms of a cyclical perspective and investor sentiment. .
I am one of those investors standing shoulder to shoulder with you. I don’t take your concerns lightly because I have those same concerns. But I am of the opinion that our patience is going to pay off in a big way. I have peeled the onion back several layers and have seen the core—it’s made of gold and silver with the immediate outer layers made of molybdenum.
The one point I would like you to take away from this article is simply this: Golden Phoenix has empirical proof by way of equipment; by way of a predominately paid for working molybdenum mine; by way of talented personnel and by way of cash flow that they are the real deal. We can now add EXPERIENCE to the mix.
But it wouldn’t hurt our confidence in the least little bit to revisit their website and review the photographs of the new rig and check out the specs on that piece of machinery. It is exquisite. In addition, they’ve retrofitted that drill rig in order to drill at a 45 degree angle which is a very important point to note.
Finally, they have the drill team, (and no I don’t mean a marching band), which will operate that drill at Mineral Ridge in the very near future. I really need not go any further-just allow me to suggest that you be a wise and astute investor and perform your own due diligence. I cannot help but believe that you will be impressed. I also like you to review my past articles on Golden Phoenix which can be found in my archives at www.seacoast-consulting.com. Go to the search function, and enter Golden Phoenix. And by all means, sign up to receive our latest updates. The one thing I can almost guarantee you is that you will not be overwhelmed with emails from me. It’s an inside joke because I should put out more articles than I do. (I’m working on it already!) That having been said, I strive for quality—not quantity.
Performing on Promises
I have heard many companies talk about the concept of making a significant discovery, building a mine, and then using the money generated from that mine to continue exploration. It’s a great business plan yet few companies can actually say they’ve accomplished this most difficult of feats. GPXM has done it and will continue to get better at it. I also see them polishing both their strategic objectives and their tactical skills.
They’ve taken a company which had one foot in the grave, if you’ll excuse the expression, and completely turned it around so as to make it not only viable in the short term but have positioned it for enormous long-term profitability.
Look, I’m “guesstimating” here but I would suggest to you that fully half of the junior mining companies talk about the idea of making a significant discovery (strategic), building a mine in order to create cash flow (tactical) in order to fund further exploration (strategic) Very few actually do it. Golden Phoenix has done it and continues to do it and yet the market gives them very little credit for this incredible feat.
Back to the Future
“GPXM anticipates commencement of Exploration on their Mineral Ridge Gold Property”
Golden Phoenix is now going back to its roots—gold. A funny thing happened on the way back to those roots. They ended up developing profitable molybdenum mine with their joint venture partner, Win-Eldridge.
So be it! The market which is straddling a “Go Kart” is getting surpassed by a star studded enterprise known as Golden Phoenix. The market’s loss is your gain because opportunity arises from a lack of understanding. The world simply doesn’t understand in a linear sort of way, what GPXM has accomplished and continues to accomplish on a daily basis.
In the final analysis it is my firm belief that the market will catch on. It is also my belief that the market is not always correct as some would have you believe. Currently, the market is simply not paying attention.
I think there are several things conspiring to devalue the share price of GPXM and they are the same events that are conspiring to depress the share prices of many excellent companies.
Mom-and-Pop investors are watching the National Financial news and are pulling in their horns on every level. Mom-and-Pop America are trying to get by with job losses and a shrinking purchasing power vacuum which does not allow them to think about buying speculative companies. In other words Mom-and-Pop America is really trying to keep their head above water in a withering financial storm which promises to become worse. A few thousand shares of GPXM in my model portfolio may be of significant value in a year or so.
I think that Golden Phoenix has a very bright future regardless of all of the obstacles that have been placed in front of them; regardless of the obstacles they’ve already hurdled; and regardless of any extraneous distractions which may be currently occurring at the company.
Listen, I realize that it is very difficult to keep asking people for patience when they need money, they need profits, they need to make their house payments, they need to put their kids through college, they need to survive their own medical crises, they need to pay the incessant taxes that the government claims are constantly declining when we all know they are constantly increasing via inflation, and via the declining purchasing power of the dollar. It’s a messy game.
Nevertheless, the road to riches is never easy. And of course we all know, the higher the risk, the higher the reward. When I look at Golden Phoenix at $.25 a share I find the risk to be minimal considering their assets; considering the fact that the number of employees and staff has gone from 8 to 80 within 18 months. This is a company that has growth written all over it.
I own a great many shares of the company and I shall continue to purchase it in the open market. That’s my way of telling you that I think this company will do extraordinarily well moving forward. I can’t think about the short-term because if I do it makes me crazy. So I put my blinders on, while still talking with the company and watching their performance very closely. I know many of you have written in to me and you wonder why they don’t put out more production numbers or you wonder why the share prices aren’t higher or you wonder if they’re going to make a it, and on and on and on. Every question is valid, every question deserves an honest answer and so I tried to give you those honest answers. The one thing I cannot give you is a time frame as to when this company will break out from this $.25 to $.30 range and spike upwards. No one can. But that does not negate me from believing that the company is moving at warp speed while the market perceives them on a tricycle.
The Big Picture as of March 1, 2008
As always, we have to understand the nature of these junior mining companies in context. We understand of course that they are not for the faint of heart. As importantly, we need to understand that the economic climate in the US is a big question mark in the minds of most Mom-and-Pop investors. I am a Mom-and-Pop investor so I can relate to what is occurring in the minds of many investors.
The one thing we really need to understand and have clearly ensconced in our minds is where we are in the commodities bull market. My belief is the same as the fund manager who told jme that he believes that we are in the second inning of a nine inning game. We have a long ways to go in this bull market in commodities and precious and I believe it is to the upside. I am firmly committed to that ideal.
As far as I can discern, those who would endeavor to inform you that gold and silver are at the top of their moves are out of their minds That’s not being very diplomatic is it? But I continually refer back to the high in gold in the 1980s when it was at its zenith around $850 per ounce. We have to understand that those dollars in 1980 are worth 75% less than what they are worth today. Again if we look at gold and silver as a barometer of the nation’s economy, it stands to reason that the powers that be would prefer to see gold significantly lower than its true value. Now I’ve said that so many times that I’m sure most of you are sick of hearing it so let’s just say that statement is for the “newbies”. But we should all be cognizant of this very important fact and if we extrapolate those dollars from 1980s to 2008, gold should be, even in nominal terms, well over $2200 per ounce. That is as far as I am going with background information today. But you can rest assured that I’ll have more to say on the subject in the near future.
But make up your minds once and for all as to which camp you are pitching your tent. Those who will straddle the fence are going to get chafed in very sensitive places.
Golden Phoenix in a Paragraph
Many of the long time shareholders are actually rather sanguine about the situation because they know that this company is constantly picking up one foot and putting down the other on a daily basis. They are getting the job done and I think it’s time that the other shareholders realize is there is empirical proof that this is true.
I’ve said it before and I’ll say it again: Golden Phoenix has a very bright future, even as they steadily increase their output of “super-sacks” of molybdenum. Simply visit their website to view empirical results. Rob Martin, the president of Golden Phoenix, does an excellent job communicating with the shareholders. This site is actually fun to visit and I personally like the pretty pictures; having long ago understood that a picture is worth a thousand words. More to the point, those pretty pictures are empirical proof that his company is moving forward at warp speed even though the share price has its own issues.
The fact that Mr. Market is running around slamming into rubber bumpers should be of no concern to us at this juncture. I say that not out of any disrespect, but because there are so many quality junior mining companies that appear to be drifting aimlessly vis-à-vis their stock price. If you are looking for a quick overnight “get rich quick scheme”, get out of the sector. If you are looking for long-term growth and long-term capital appreciation, it is my opinion - my very firm opinion - that fortunes are going to be made in this sector. Fortunes have already been made and more are on their way. At the very least, we should understand the nature of these quality junior mining companies in order to take advantage of what they have to offer when the time suits our finances.
I’m out of time.
But I’ll incorporate some of these other Headlines along with some charting in the next article that will be on our site at www.seacoast-consulting.com. Do you think I’ve “plugged” the site sufficiently? No? Well, then be sure to email me at consulting@seacoastpub.com. I look forward to hearing from you.
Until next time,
D. Stewart Armstrong,
seacoast-consulting.com |
