Back on January 1, 2014, I decided to leave the metals and mining industry and focus solely on my local businesses here in NJ. Grandich Publications had approximately 19,000 readers when I decide to cease publication.
Over three years later, I had no idea (until last few days)how many people were still reading my blog in hopes of my commenting on metals and mining. Since Friday morning, I received more emails asking I spend more time on that “former” world of mine, than any other topic(s) I spoke about in the last 3 years combined. Some went so far to urge me to come back to the industry, especially since I speak about the emergence of a new, secular bull market for gold.
While I’m flattered, the best I can do is meet you half way. I will make an effort to post more about metals and mining in general, but outside of the two stocks I own and have mentioned on occasion, I will never ever be talking about other stocks to buy or ever work for any type of publicly-held company as a consultant again.
With that in mind, please allow me to follow-up to last Thursday’s night posting by adding the following points on Nevsun Resources (with an understanding this is not in any shape or form as some advisory service, but instead a private investor speaking out aloud on how he feels about one of his holdings from a highly biased position).
- By last Friday’s end of trading, I had greatly added to my position by six figures.
- Having already put enough egg on my face to feed a small army in my 33 years in and around Wall Street, I’ll risk some more “sunny-side up”, by stating the lows this past Friday should never be violated unless when the stock gets to $10, they split it more than 4 for 1.
- NSU management has error greatly on the side of caution in their reviews and outlooks ever since Cliff Davis took over about a decade ago. However, I found some key points and sentences that wouldn’t stand out unless you were close to this story. Hearing them made me feel quite confident Friday’s sell off was my earliest Christmas present ever. You can read the transcript of the call here.
- I fully appreciate the dividend cut as noted Thursday night. When they just had Bisha and were making money hand over foot, it was prudent to pay a nice dividend. But Timok, IMHO, is a world-class future mine(s) and using the cash from the former dividend payments will return far more to me in the end, than what the dividend could remotely have come close to. Those who bought for the dividend and puke their shares out Friday morning will be getting a “Thank You” card from me before too long.
- This story comes as no surprise and it would also come as no surprise that a Chinese group seeks to take out NSU for both Timok and Bisha (The Chinese are already well established in Eritrea). However, I think the lead potential buyer is Lundin Mining, and this share weakness opened a window for them that I don’t think will last but a few weeks to a couple months.
Bottomline – For me, the risk is $.50 lower and $5+ in NSU, unless metals prices collapse and some political turmoil occurs in either Serbia, Eritrea or both (and an overnight meltdown in general equities won’t be a positive either).
Gold – Look for some consolidation and backing and filling as the $1,250 to $1,300 area isn’t going to be a cakewalk. One of the usual gold raids would come as no surprise, taking us down to $1,225 or even $1200. But make no mistake about it, I’m personally quite pleased to have chosen gold over the DJIA for 2017 and beyond.
Please note – While I appreciated all the emails, I will not return any with investment advice. I’m out of that racket.
And I said it Thursday night and will continue to do so until they put me in the ground:
Avoidance of Internet chat forums except for entertainment purposes is highly recommended. While there can be a nugget of worthy info from time to time, rest assured if you never read one again, you aren’t doing a disservice to yourself. Many there are self-appointed experts and thrive there because quite frankly, they couldn’t do so in the real world. I will never ever, ever respond to anything someone supposedly said there about me and/or something I’m involved in – unless the party openly declared exactly who they really are (don’t hold your breath waiting for that to happen).