December 3, 2017
December 3, 2017


I’m currently somewhere in Mongolia.

You mentioned in your Invicta piece that you were meeting the new hires in two weeks and would report back. Can you give us your impressions and any details if you did meet with them?
Have fun in Asia!

Sorry for not reporting back sooner. I’ve just been inundated lately planning for this trip to Asia. I met the new hires and I’m VERY impressed. They both are more than up to the task. In particular, David Rae is a real champ. He did wonders in his past job. Read their bios. The real risk with Andean getting funding was that the company was understaffed and not capable of responding to the banks quickly enough. Completing a major project financing is a massive undertaking and there are piles of paperwork taller than me. I’m glad to see these real pros now involved in the process. Hopefully, it will begin to move faster towards a funding decision before year end.

thanks again for AAG. what do you attribute the move to? I bought some recently but wnat to buy more and remember you saying not to chase but also not to get too cute. Would you add at these levels? Same question re EGD—bill just commented on it recently as looking like it oculd move. tried to buy at 2.00 but got away from me. Finally, do you get Fred Hickey’s letter and if so would be interested in comments after you get to vietnam on his purchase of the vnm etf on vietnam. I hope you and bill do an update on last years caveat emptor column he ran. thanks again for your great insights.

Wow, that’s a pile of questions. Andean moved higher because the company has finally gotten around to telling the story–which happens to be a very compelling story. I cannot give personal advice on if what you should do with your holdings. I never try to split pennies–if i want something, I just buy it. What works for me, may not work for you.

Fred Hickey’s letter is really quite incredible. I look forward to it each month. It looks increasingly likely that we are not going to Vietnam. We’ve been in asia for nearly 2 weeks, have met with over a dozen companies and a few dozen business people. At night, we’ve been enjoying the local culture (often way past midnight). I might be getting old, but I’m simply exhausted–and I have plants at home that need to be watered. I have another full week of meetings, but then I think i’m heading home for a bit. I think we will re-boot and do Vietnam sometime later. No comment on Vietnam for now. Last month, Fleck told me to remind him to do the Caveot Emptor update. I emailed him–it’s out of my hands now…

Thanks for your china post. Have you looked at Bejiing airport as a stock? Some very smart investors own that one and its a way to play china with no influence of other currencies. Pure china play and all tied to the yuan. Ive owned it in past but have been looking at ways to get access to chinese internal growth and with 100% yuan exposure given I think its undervalued. Have fun

I know nothing about this company, but am passing it along to readers as it may be an interesting way to get China exposure.

Kuppy- great piece on China. i have sent multiple people there to try and figure it out from an investment standpoint. here is what i have determeined- buy what they are buying, and sell what they are selling……

Thanks. This is sent by a real pro. It’s actually one of the smarter things anyone has ever said about China..

i lived in asia from 96-05, first in singapore then in china (shanghai) and i always used to tell folks who marveled at how modern china was that they should be careful. biz people arrived and were taken by car service to their 5 star hotel and shuttled around with interpreters to big fancy office buildings, etc. i argued that china had the side foreign visitors see and the side regular folks saw and how i lived in a fancy apt. bldg but across the street the local housing had no running water. a subscriber of mine (i write a market newsletter) sent me your note because he remembered that i always said what you just wrote about. i believe you have said it more elogquently though!
recently an australian friend who lived in shanghai from 96-06 went back for a visit and sent me photos. they have cleaned it up alot since i left 5 yrs ago but the dichotomy is still there!
and one thing most folks dont even talk about is that for the most part china is still a cash society. they even pay their bills by cash, not by check!
thanks for this

Not a question, but thought i’d post the thoughts of a reader with first hand china experience

While your current travels will take you nowhere near Western Oz, I was wondering if you had any further thoughts about Apex Minerals in the 10 weeks since you last wrote about it. The June quarter came in just about breakeven, and the company has since issued 250mm shares to raise A$5mm. My question is: Are operations proceeding as you had hoped, or are you still “worried about Wiluna”?
Thanks, as always, for your generous insights.

Junior mining always scares me. I’m not just worried about these companies, i’m frequently terrified–you have to be if you want to invest in them. They’re always one moment away from disaster. That said, Apex seems to be doing roughly what I expected. The loss in the recent quarter was down signficantly from the prior quarter. They likely even made a few dollars based on July production. The raise is unfortunate, but I sort of expected that something would be done. You cannot run a mining company with 7m in monthly payroll on 1m of cash in the bank. Ironically, 250m shares is only 7% dilution. Isn’t junior mining great? 5m in cash should de-risk this a bit and give them a lot more flexibility going forward. I’ve made a mental note that if things do not continue to improve, then I’m out. Remember, this is a pretty binary sort of investment–so I’m playing it extra small.