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May 30, 2011 Dear Friend,
We depart this evening to Perth in
Western Australia, where we will participate in the Fortescue Metals
presentations in Perth, its Pilbara mines and Port Hedland logistics. We
believe it is very important to visit the competitors of companies we follow
in our effort to keep abreast of Vale, Rio Tinto, BHP Billiton and Anglo
American. We will visit the Boddington gold mine of Newmont Mining. We will
also meet several junior iron ore companies, including Gindalbie Metals,
Adamus Resources, Mt. Gibson Iron Ltd. and Murchison Metals. We probably
will not publish a Spot Markets Weekly next week as my arrival is around
midnight Sunday morning.
Attached are our comments, field notes and photos from visiting Augen Gold, Trelawney Mining, North American Nickel, Pele Mountain Resources and Appia Energy in the Swayze Trend, Sudbury and Elliot Lake, Ontario this past week. We go to great efforts to try to discover good companies at early stages, either for future research reports, due diligence on the 45 to 50 companies to be present at our next November 29-30, 2011 and March 28-29, 2012 conferences both to be held at the Boston Harbour Hotel or for our own portfolio management. We actually react first to the underlying geology, documented resources and quality of the people, and we ignore market capitalization. Thus, we visited a private concern Appia Energy, North American Nickel at < $ 1 mm in market cap (spin out of VMS Ventures, HudBay Minerals' partner) and Pele Mountain and Augen Gold that are < $35 mm in market value. Trelawney Mining, a larger cap trading near $110 per oz of inferred resources assuming a 50% markup or increase from stepout drilling, is between $0.6 and $0.7 billion in market value. We believe steel, aluminum, nickel, lead and zinc demand have been robust at record levels globally YTD, and we emphatically reject the morose commentaries of economic slowdown in many financial publications in discussing various markets' data in this week's Spot Markets report. Gold bullion is almost 1% from a breaking the $1,566 closing April 29th all-time record. Life is good. We initiated research coverage this past week of Rock-Tenn with an Underweight rating and a $57 price target, as we believe consumer spending squeezed with high fuel and food prices squeeze containerboard demand and there already is much widespread anticipation of a smooth and quick turnaround indicated in its rapid share price appreciation. Faithfully, John C. Tumazos, CFA |
Copyright © 2008 John Tumazos Very Independent Research,
LLC
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