Tuesday, August 17, 2010
Today's Trading
Today Canaccord handed the ball off to Anonymous; how many times have we seen that before in the last few years. To answer bigjohn's question - could this be shorting? It certainly could be. Pay no attention to the official short numbers for CMM or any TSX-listed stock. Naked shorting is rampant and not reported.
However there could still be a lot of shares out there from debt settlements and previous financings. Could PK be selling? I highly doubt it; she's not hurting for money after being paid $1.2 million in 2009 and she just received another $1 million to retire for "personal reasons". She once said that fair value for Century shares was in the $6 - $7 range; I don't think she is willing to part with them now for 40 cents.
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Quoting Mikes's figures with tks
-Lamaque5800oz + SJ1600oz=7600oz x 12 = 89,000oz/year
-Cash cost- $700
-Gold price-$1100
-PE ratio- 10
-Derived valuation- $1.00
Using Mikes's approach, I toyed around a scenerio from the angle of a die-hard optimist in me:-
-Cash cost-$600 (assume an improvement with larger prod runs)
-Gold price-$1200 (For numerous varied reasons I strongly believe gold price will be much higher than $1200 in the near future)
-PE ratio - 12 (believe this is not unrealistic, only a bit more optimistic. This is also a multiple suggested by Victor in an interview carried in The Gold Report dd July/10)
so, Lamaque prod -5800/1400tpdx1950tpd = 8000oz/day
Deduction(toying)
-Lamaque8000oz + SJ1600oz=9600x12=115,000oz/year
-Profit per oz =$1200-$600=$600
-Profit per year =115,000x$600=$69,000,000
-Market Cap = $69million x 12=$828million
-Derived valuation = $828/$150 x $0.43 = $2.37
Having derived this and knowing what is "knowable" about gold and gold price trends + knowing all the mine's risks, positives and potentials (with the best up-to-date info glenced from this blog) I add another lot at $0.44 2 days ago.
Frankly, I am begining to set my sight to post start-up. Being a forever optimist, I believe in one of the mining communities's sayings. i.e. - "when things start to get better, they will continue to get better" (hope I have worded it right) Cheers!
Wikipedia has a very nice article on naked short selling. http://en.wikipedia.org/wiki/Naked_short_selling#Normal_shorting
for those who are not abreast on the illegal nature of short selling it lays it out quite nicely.
2 things that can prevent short selling. Taking posession of your share certificates, but nobody does that anymore OR put your shares up for sale at levels out of reach. ie. at a great premium.
OR contact the TSX/OSC regarding these alleged activities. I am not sure how much notice it would get but IF an investigation does get some legs that would change the landscape in heart beat for the SP.
Comments? Am I out to lunch on the subject...
well Rump, i just listed 1 third of my holdings at $4.00,come and get it boyz,and to think,someone tried to call me on it,lol, did my part,anyone else! Da Minigoon
Thanks for the Wikipedia heads up. That was an education. Just listed my shares. Now I can start dreaming about that new red convertible.
Dennis, Fredericton
Question on this mornings start of trading.
About 5 minutes before the trading bell there was a sell order showing of 400,000 shares @ .355 for one order. The buyers were lining up at the .355 level. As I recall there were 490,000 bid.
At the bell, the sp shifted back up to .40/share. The one order to sell 400,000 at market had been withdrawn.
What happened here? Did a "naked short" inadvertently play their hand? Learning never ceases to amaze me.
Dennis, Predericton, 423 km due south of Val d'Or
You don't value miners by P/E. A miner has to be valued by net present value because its earning assets don't extend indefinitely to the future the way eg a consumer discretionary company's assets do.
Union Securities tagged Century's Net Asset Value at $1.00, so that's fair value for the company.
It's trading at a discount due to bad financials, failure to increase production sufficiently to tap the escrow, people hating Peggy, people now hating not having a CEO, and (probably) people also not being to keen on some of the remaining guys like Lamarque.
As far as financials, I guess we can assume Q3 cash costs will be reduced back to the company's guidance, as this blip was caused by the construction of the ponds at San Juan. Hopefully grades improve in Q3 with contribution from Bedard and less muck, and tonnage guidance at Lamaque has been assumed to be 30,000 by most analysts anyway (including here) due to the delivery delay et al at Lamaque.
Question on this mornings start of trading.
About 5 minutes before the trading bell there was a sell order showing of 400,000 shares @ .355 for one order. The buyers were lining up at the .355 level. As I recall there were 490,000 bid.
At the bell, the sp shifted back up to .40/share. The one order to sell 400,000 at market had been withdrawn.
What happened here? Did a "naked short" inadvertently play their hand? Learning never ceases to amaze me.
Dennis, Predericton, 423 km due south of Val d'Or
Thats not my 500k floating around,I'm asking $4.00 on 500k shares
Da Goon
The same 400,000 block has been jumping around at all sorts of prices for over a week. Used to be it was suppressing an upmove by sitting in the asks at 42 cents or so... I was wondering where the heck anyone had managed to buy 400,000 shares to be able to sell at a profit for 42.
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