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07/24/2010

We have been experiencing email difficulties. Multiple people have told me that they have not been receiving (some or all) email updates. I believe this problem is now fixed. You should be receiving all future updates if you are signed up for them. You are encouraged to scroll through past updates as you likely have missed some emails.

Kuppy


Your reaction to AAG’s financing deal?

Thank you for your site.

http://www.marketwatch.com/story/andean-american-corporate-update-2010-07-22-121080?reflink=MW_news_stmp

I’m not really sure of the question. The company was running low on cash and needed to raise more. This should hopefully get them through to some sort of funding decision which will be much less dilutive. Until you have cash flow from your mine, you need to continually raise capital and dilute shareholders. That’s why junior mining is such a tough place to make money. I have figured that the company would need to raise some more money and they just did. Let’s hope this is the last of it. With the shares at 70 cents, the 50 cent deal looks silly, but a week ago when they finalized the terms on it, 50 cents was actually a few cents over the market which is a pretty amazing show of confidence by the people who participated in the deal. Normally, funds ask for a big discount to the market and warrants. This deal had neither of those. In summary, I hate to see dilution, but this is roughly in line with my expectations.


Kuppy,

Thanks for having this blog. I find it very informative.

You own shares in Energold. Do you have any opinion about the investment merits of Impact Silver, which Fred Davidson also operates? Energold has a decent equity stake in Impact Silver.

Have a nice day.

Glad you enjoy the site. Fred Davidson is one of the smartest businessmen in the whole commodities business. Anything that he’s involved with is worth looking at closely.

I’ve been to the minesite and am very impressed with the operation. What they’ve found thus far isn’t world class geologically, but there’s a lot of it and Fred is an amazing operator. His costs will remain far below the industry average in Mexico and unlike most mining CEOs who just dilute shareholders because they want to grow, he’s grown the company organically with minimal dilution. If I didn’t own so much Energold, I’d probably buy some Impact. Put it this way, my father doesn’t know mining, but visited the site with me and bought some Impact for himself. His logic was the same as mine–Fred is a great businessman and everyone at the mine-site was brilliant.

Impact is certainly worth following closely. I am not a huge fan of silver currently, otherwise, I’d probably own this as my favorite silver play. My guess is that they grow production at 30-40% a year for years into the future and they do it with minimal dilution.


I want my website to be a place for erudite yet at times discordant thought. I do not know if Matt Simmons is right in his thinking, but if he is only half right, this spill could have real scary consequences. Thus far, he has been right about things every step of the way. I think it is worth spending the 20 minutes to listen to him and then let your mind wander. I do not yet know what the investment implications are, but what will the world look like with oil at $200 a barrel?

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/7/17_Matt_Simmons.html