Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Sandstorm Gold -- Ignore unavailable to you. Want to Upgrade?

To: TheSlowLane who wrote (748)	11/12/2012 2:09:20 PM
From: architect*	Read Replies (1) \| Respond to of 1133

$15 without me, I'd be a big buyer at $12. In the space of junior precious metal producers, those similar to Sandstorms streams with good revenue in Q2 and Q3 2012, what are your favorites? I have SilverCrest SVLC/ SVL.v, Timmons TMM.to / TGD, Luna Gold LGC.to, Aurcana AUN.to, LGC, Fortuna Silver FVI.to FSM., Brigus BRD, Alexco Resources - AXU. You can send me a PM if you don't want to promote your ideas / investments in public. In oil and gas mid-cap producer space, Gran Tierra - GTE and Coastal Energy CEN.to are my biggest investment positions. I'm moving some investment dollars from mid-cap oil producers into the junior precious metal producers. FWIW my general investment guidelines, My investment criteria are: 1) Companies should be self funding which means the 2012 Capital Investment Program is funded with 2011 funds flow from operations. 2) Risked Exploration Program two years forward 2012 - 2014 is equal to, or greater, than their Enterprise Valuation. Good future exploration potential to replace existing production. 3) Enterprise Value is a discount to 2012 - reserve value NPV ~ 10% - Discounted cash flow with a 5 times multiple is approximately equal to 2P NPV 10%. 4) Enterprise valuation is 3 - 5 times current annualized or 12 month trailing cash flow, (funds flow from operations). 5) Working capital is increasing quarter to quarter. 6) No debt, or minimal debt, less than 30% of 2012 - Reserve value NPV 7) Production and operational costs are low by industry standard. 8) Country royalties are low by industry standard. 9) Country corporate income tax is less than 35% 10) Land portfolio with 5 year inventory of high impact exploration prospects. 11) Diversified and or moderate country risk. 12) Operations in high growth countries such as Colombia with 2012 GDP growth of +5% and Thailand with 2012 GDP growth of +6% and mexico with GDP growth of 5%. 13) Invest in countries where I would travel on holiday. For precious metals I like North America, most of Latin American and Colombia, Mexico, Peru, Chile, Brazil, 14) No investment in countries with high geo-political risk: Venezuela, Ecuador, Bolivia, Argentina, Nigeria, Congo, Kenya, Somalia, Kenya. 15) Oil and gas discoveries should be implemented and reach initial production in 2 years and peak production in 4- 5 years, thru reinvesting funds flow from operations into capital investment. That's realistic in on-shore oil discoveries near production infrastructure (oil pipelines) and a point of sale, but not reasonable for off-shore oil and gas, remote or stranded exploration prospects and not reasonable for precious metal mining. 16) The UK North SEa has been a location where junior oil companies making sizeable discoveries have not been successful implementing a business plan due to the time and cost of bringing oil and gas discoveries into production. Life too short, to invest in a project that takes over 5 years to begin generating production revenue. 17) Commodity prices should be increasing which often occurs during the late phases of an economic expansion. 18) Good management and good professional support of operations.