UPDATE TVI

TVI reported today that they have completed shipment #24 for gross revenues close to 15M$ and over 1,25K tons of copper concentrate remaining in inventory. Also worth noting is the total zinc already produced that should be shipped end of december. Actually this is money in the bank.

The value of the shipment is very high when you look at copper price today against 6 weeks ago.

If cost remained under control (even a bit lower) we could have some positive surprise when Q3 results are published.

I had estimated about 1M$ in loss but could be a little less.

Interestingly, even when copper price have dropped by more than 25% recently, the share price (even if actually very low and disconnected against share value) the share price did remain pretty stable.

It would not need a lot to move higher as resistance over 0,06 is really low.

UWN the reason behind this new top pick

When small is beautiful: That could be the story of Nevada Gold & Casino Inc.

When I indicated that this corporation was under my radar last year (stock was trading at 1,07$ at that time) I was far from believing that suddenly with some great acquisitions, that company could double its share price and that I would still believe that it was only the beginning. Think about that: market crash, unemployment in the 9%, no economic growth and your company double its market cap??? You definitely must have done something right and here is what I found and by the way based upon recent market activity, I am no longer the only one that is starting to be interested into that success story.

Naturally we should not compare UWN to some largest company like LVS, MPEL or WYNN as they are clearly not competitors. But it is very important to note that the entire entertainment sector has been very profitable lately especially in gambling outside the United States and this is where UWN does make a difference. They have been able to create their own niche in a very difficult market. So, what is this all about?

UWN owns and manage small scale casinos almost directed toward the clientele of Mr. everybody that does some gambling for fun and in an environment very friendly where customer seems to be the number one priority. One point that I should mention is the fact that all employees from their newest acquisition (Red Dragon) went to a customer service training seminar almost immediately after they finalized the acquisition.

It would also be very difficult to compare with any other company as there is not too many that are operating that kind of mini casinos and operating more than 1.

So, what should we expect form UWN ?

They have the intention to acquire some casinos in Nevada and it could add some 3-4M$ for each unit they buy BUT it could add to the total debt already in the 15M$ range.

And debt is one problem to come with some being due in 2012 but their latest association with Wells Fargo to find a refinancing solution could ease that one out if negotiations are successful. If they were to find a new loan agreement covering all the debt and at better terms and at somewhat a bit lower interest rate, this could give them a break and allow them to breathe easier.

On the other hand they have the right to issue up to 20M$ in stock and this would cover more than the total debt load leaving even some more money for other acquisitions.

If UWN consolidate their actual assets and integrate them rapidly they should be able to generate a lot more net revenues and be ready for some more expansion AS LONG as they do not have to overspend in company management. At this point, it would not be wise to get that expansion in areas that they do not operate actually due to overhead expenses.

So here are my expectations for Q2 2012 if everything goes as expected:

-          Net EBITDA of 1M$ (increase provided by increase in earnings, expenses staying at current level in % , lower management and legal expenses)

-          Earnings of 16M (due to the revenue increase from Reg Dragon)

-          Net revenue per share of 0,03 to 0,05

They will definitely continue to be very aggressive in their development and as long as they stay within their ‘know how’ range there are no doubt that UWN will be a great winner in 2012. Markets will stabilize, unemployment will get better and consumer confidence will be brighter. All the needed elements will be in place to send UWN on track for a record year.

For these reasons, UWN is now a top pick for the remainder of 2011 and for 2012. Price expectations are within 2,90$ and 3,70$ before December 31^st 2012 for a decent 50% to 100$ return.

As usual never invest more than you can afford to lose and always do your own due diligence before investing.

Week ahead

It will be very interesting to watch the first couple of trading days. last week was a great one were even unemployment was unable to derail the bull but i would not be very surprise to see at least one day where market will try to test who will win: bears...bulls....

TVI should give some update on the expected shipment. I think we should know by wednesday.

Regional banks could continue to rise modestly but surely this week (BPOP, FBP, DRL) and i still think there are some rumors going on in the Puerto Rico banking sector where 2 should merged: DRL and FBP. Who will buy the other ??? Either case we win

LVS, MPEL and our newly member UWN should continue to rise this week. Keep a clsoe eye on UWN. After releasing a very good quarter last week, some volatility was seen on thursday and friday when some profit taking happened. Expect a rebound.

BZH could be helped by the numbers to be released this week and at this time it is pretty undervalued.

Lot more action to come so stay tune.

WPX has been added to UNDER THE RADAR picks

WPX:TO could be a great addition if it's share price continues to hold in the 1,15$ to 1,30$ range. Otherwise, if price continues to decline or if insider selling continues, i would wait until 0,75 to get into that company in a very agressive way.

At this time, it is not clear of the profitability of their project and until the feasability plan is completed it will be difficult to assess the real value of this one.

For the moment it is more of a speculative but based upon the 43-101 it could be profitable and there could be a lot of volatility between now and the feasibility project that should be released mid 2013.

As usual any interesting event should move WPX from under the radar to a top pick but the conditions needed are the following (as for any other stocks UNDER THE RADAR):

- fluctuation of share price minimal to avoid trying to catch a falling knife
- a sudden price increase at this stage would be considered speculative move and wihout a press release it will not be considered to be moved to TOP PICKS
- Regular press releases concerning updates on land, feasibility advances could trigger a move to TOP PICK
- Price stabilization and lack of volatility could also trigger a move to TOP PICK
- Insiders buying in large quantity would move WPS to TOP PICK after prices is stabilized
- Volume increase (buying pressure) for some weeks could move it to TOP PICK
- Any other VERY positive news could also move WPX to top pick

As usual, never invest more money than you can afford to lose and ALWAYS do your own due diligence before investing in any company.

ALERT UWN

Their Q1 results are really impressive as this is normally a quiet quarter. Based upon these results, expect another good share price increase.

After listening to their quarterly conf call, i can only imagine what would happen if Washington would allow slot machines to be part of casinos in that state. There are no promises about that but with State finances being what they are (really bad) i would not be surprised to see some kind of approval in return for some good tax $.

Volume is still high (for UWN) and i think that Q2 will be again better due to their new acquisition gettting good steam.

A complete review should come sometimes this week-end. Stay tune! 

ALERT UWN

Volume as picked up recently and there is a lot of buying pressure. Either somebody know something or many more investors are now discovering UWN.

No matter which one it is, it seems very positive.

OCNF is delisted from my top picks

Based upon recent developments and economy still lagging, OCNF is no longer part of my top picks and my position has been sold.

UWN a diamond in the rough. Welcome to my list

Ok...Economy is still in the negative territory and finding great value stocks is still very difficult. But UWN could be the next one in the gaming industry to answer my criterias.

They will be releasing their numbers for Q1 by september 15th and i expect some very very good news.

EBITDA is increasing faster than gross revenues and this is a sign of good management.

Their last quarter did showed high increase in all aspect of the business and i am almost convinced that Q1 to be reported will be another positive surprise.

Complete analysis will follow their 2012 Q1 reports but to me UWN will rock the place!

ALERT QE3

It seems that at this time there will be no more money printing from the US fed.

That is great news. Let the market correct itself without government intervention.

With some good fiscal policy and some help for new homeowner, economy will get back on track rapidly. 

Have we reach a bottom

I am close to declaring a bottom on the market.

VIX index is getting lower and gold is getting a well deserved correction.

If tomorrow we see a decrease again in the VIX and another 50--100$ drop in gold i will be inclined to say we have achieved a bottom.

In any case, bottom fishing is still great and there are still way undervalued stocks actually: BPOP for 2$, DAN for 11,61$   Ford for 10,45$ and the list goes on.

I would not use all cash asides to buy immediately, but i have already start buying since last friday one smll step at the time and buying on the down dips.

Market craziness is not over but i think it is now safe to get back in and those that are still thinking about going back in recession: i do not think so.

ALERT Puerto Rico banks

I think we can call a near bottom in the case of DRL and BPOP and a 3,50$ for FBP.

This market has already oversold most of the US banks and these 3 are now on sale at the price well below book value:

BPOP     2.07 = 0,61 of their book value
DRL       1.37 = 0.37 of their book value

FBP        3.46 = 0.13 of htteir book value

Sure Puerto Rico is having a hard time recovering from the last recession and it may take another year but at these prices, it is worth to start accumulating on the down dips. Expectations of profits are within the next 12 months:

BPOP       5,75$ (this is the one where it is absolutely oversold)
DRL         2,72$
FBP          5,25$

As usual never invest more than you can afford to lose and consult your financial planner before investing in any stocks.

UPDATE TVI

What’s up with TVI ?

Last quarter report was not as expected, to say the least, but even then there were some good realisations that obviously were overshadowed by other very disappointing items.

Let’s start with the bad one:

-          The costs of chemical products seem to be rising. I think the zinc copper separation was actually harder to achieve than originally thought. The price received for the zinc is offsetting a good part of those rising supply cost and did increase total cost to produce.

-          The fact that ship had to be re-route to Europe instead of China created the worst problem. Easy to figure out that the cost to send 5000dmt to China is by far less costly than to Europe. Looking at the details, this expense ruined the quarter and I do not see any changes for at least 1 or 2 more shipments allowing TVI enough time to find a new smelter nearer Philippines.

-          Overall debt is getting higher. Some debts are a necessity but at this time increase the debt level could be suicidal. When water is running, grab a bucket but now it is time to say enough: no more room for the buckets.

-          Cash is getting lower even if TVI is STILL cash flow positive for the quarter. It simply means that they used more cash than it generated. Maybe time to assess where the money is going. To their defense there is an 284K loss due to foreign currency translation. If this was due to can$ being at 1,045 average for the last quarter, TVI could get a break on this one for Q3.

-          Very high total cost per pound equivalent most probably due to first shipment in Q2 that must have been completed when zinc flotation was not perfect and when they were experimenting a lot of different recipes of the refinement of those recipes. Still total cost per pound is higher.

-          I do not expect any profit in Q3. I expect a 1M$ loss and maybe a break even for Q4 meaning a loss for the year as I do not think TVI would be able to generate a 3M$ net earnings in Q4 unless they find a new smelter before end of Q3 for shipments in Q4.

Now the good one:

-          Cost to produce copper is going down (do not mix with total cost per pound) and should offset a good part of higher expenses

-          Mill is running at high capacity

-          Copper % is very high at 23% (average)

-          1^st  zinc shipment to be reported in Q3

-          2^nd Flotation circuit to be added that should help again lower cost per pound and increase quality of copper con and zinc con. 

-           % of copper of 1,24 (lot higher than estimated average). Remaining mine life was averaging 1,07% but we see that there is still higher copper grade available to be mined.

-          High gold grams per tons (for Canatuan it is very good)

As for Tamarok results, well it is a neutral one. They were drilling the outcrop and as suspected nothing of importance out there. THIS IS NORMAL. With the size of Tamarok, it is easy to expect many hundred drilled holes before having the right picture of this huge area. As far as I am concerned, I would not expect any updates before 2012 and as of today, this is not priority number 1.

Increasing mine life at Canatuan is the number 1 priority then it is Balabag. No surprise there.

A note about share dilution. It is false to state that TVI went from 479M shares in December 2010 to 622M shares because of TGE acquisition. 76M of those shares were options already acquired by LIM when they financed TVI for Canatuan in exchange for a 15% stake in the company. So these options could have been materialized without the purchase of TGE.

Now about the options: this is a good new: at the TVI price of today, most of them could not be exercised. About 28M options are over 0,06… and the 8M warrants remaining are at 0,045. So if price stays at this level, we could avoid another partial dilution. As for the issuance of those options, I do not see any problem there. You want the best guys, you need the best guys, then they get the best possible pay when EXCEDING results. (Easy to see when stock price moves higher and the opposite is equally true)

So what is the real picture: as of today: bad on results and great on possibilities. TVI will have to get back to profitability as I am now wondering who will finance Balabag as there are simply no other options unless oil properties were sold to cover start-up cost (I doubt that unless there are great proven resources in Alaska or Niger surprises us) and issuing shares would dilute too much actual shareholder value. So cash flow generated must increase to allow the implementation of this bootstrap mine. Canatuan should be producing until mid-2013 so it should not be a problem to fund Balabag almost completely with cash flow generated from Canatuan.(Do not mix cash flow with earnings because earnings take into account many items that do not have any influence on cash like amortization) as long as expenses stay under control and that no other major surprise arise.

Do I still believe in TVI’s future: Yes BUT at this time I would simply wait for new developments and hold my actual position hoping for the best but planning for the worst. It is time for somebody in charge to stand up, face the music and explain in ‘real’ English what is going on, what are the plans to correct those problems because margin of error is getting lower by the day and only then will shareholder be able to take a decision: keep or liquidate position.

But do not get me wrong: Balabag could become a cash cow (as did Canatuan) and we will find out as soon as the 43-101 is released, any other oil discovery would change the pattern instantly, (I say other discovery as we all know they found oil in Alaska but the unknown is how much), any 3-4 years mine life addition to Canatuan would fix part of the problem and we can go on and on. The possibilities are great but confidence is running low and the market tends to agree as we are now back to September 2009 share price.

Still not the right time to panic and still could be a great time to average down the price. But, overall it is certainly the time to get the right answers from the top officer because after all Mr James is working for us, the shareholders and we deserve to know.

I remember having been asked in the past why I would still push TVI and my answer was that until it did 2 consecutive quarters in increased negative earnings, I will still keep my target for TVI (or any other company on my top list).

Come on TVI, come on Mr James YOU can do a lot better than that.

ALERT TVI

With the posting of their last quarterly report, TVI has now been in negative for 2 quarters in a row.

They had great revenues but unfortunately expenses especially milling mining and other expenses went exponentially.

So at this moment, i would put TVI on hold until further clarification. 

Tomorrow is friday. In the good old 2008 and 2009, it was very often sell off fridays.

So for tomorrow i would watch for the DOW to test the 11,100.

If right after the opening bell, it goes under 11,100 watch for 10850. If it dows not hold, we could be retesting the lows of wednesday at about 10,700.

This market is still very sensible to any kind of news and we do not know what week-end could bring.

Because of the fact that (i think) there is a 2 for 1 probability of a down leg tomorrow many traders could be tempted to liquidiate some positions in case of an early morning rally. So if you bought some at a very cheap price yesterday or early today, WAIT before adding some to it. Tomorrow could still be very tricky and honestly i do not think that volatility is over nor this is a rally starting. Too early and no capitulation YET ! 

Is this the bottom

NO !

Expect some more turbulence today and friday especially if employment numbers are worst than 410K.

We have not seen as of yesterday the capitulation yet and it will take a huge selloff to fix it all.

It is still the right time to start shopping but again not the right time to buy all at the same time: you want 1000 shares of company XYZ then go ahead and buy 250. It could very well be worthed to 10$ in fees you will have to pay more.

NEVER INVEST MORE THAN YOU CAN AFFORD TO LOSE

Buyers beware

The yoyo game that market is playing now is another good exemple of market traps. Very often after a huge drop will you see a sudden come back only to go down the day after.

So with that in mind, stay focus on stock VALUE. For example WFC is a steal at today's price even if it was to go down by another 5%. If you have a 2-3 years planning, this could be the occasion to take your time and invest slowly: you want 100 shares of WFC? Then go ahead and buy 50. Yes you may have to put in another 10$ in fees but could give you another shot at the can if stock goes down again. If it goes up suddently: WAIT before buying the other 50. It could well be another trap.

Do not expect the market to be up tomorrow with a 400 point rally and keep it this way forever... It may well rebound tomorrow if employment data is at about the same level (400k-415k) but if for any reason it was to be over 450K get ready for another HUGE drop as it would be almost a confirmation of another recession or double dip recession.

Personnally i do not think we are heading toward another recession but actually this is a market of fear. Remember that whenever there is fear get greedy and the oppsite is also true.

NEVER INVEST MORE THAN YOU CAN AFFORD TO LOSE.

Where are we heading

I expect the markets to rebound somewhat this week up until friday and if employment numbers are under 400K for this week, then we could imagine a rally and if they are not it could be another drop at least equal to gains from today to thursday.

Overall the market is totally oversold and near if not at the bottom now.

I have seen panic selling yesterday and even this morning futures are really highly volatile.

That being said, remember right after the selloff in march. 1 month ago when you were looking at share price at that time many would have dream to have bought a lot more. Well, we are at these levels now: DAN at 11$, Ford at 10$, LVS at 37$ and so on.

I think it is time to get back in slowly but surely. If you would buy 1000 DAN today, i would start by a 25% chunk and see what happen during the week.

In any case, never invest more than you can afford to lose and if your are investing for a 3-5 years, well this is it: bargain time !

Market Update

Time to get back to work...

We have been slammed recently with all kind of problems and friday S&P rating USA AA+ is nothing to help.

But, if you have invested in companies that are well undervalued you may have suffered a bit more recently  and up and down swings are not over. Expect great volatility early this week and a terrible monday morning trading session. HANG IN THERE. It is not the time to throw out the towel. You have not loss anything until you sell. Now imagine if you were on the speculator side and fully invested in comapnies that are worthless: you could be slammed a lot more.

Some may be tempted to sell on the early opening monday but it could be a great mistake. Most of the buyers will be on the sideline knowing that many will try to get out at any price.

So if there is one place to be tomorrow: it is on the buying mode right after the early crazyness stops.

Remember why you bought the companies you bought. Remember what were the price you were looking for before starting to sell. Do you think it has changed that much???

Do you think that for example DAN that was trading at 19$ recently is now worth only 13$ because of USA problems? No way. It may take some time but i think that it is actually the second biggest chance to get into the market at heavily discounted price in less than 3 years. Opportunities will be there tomorrow morning for those who are ready to accept some great swings in value over the next 3 months but who are looking at the longer term picture.

Expect some more updates tomorrow on many of my top picks.

UPDATE TVI

Reading the posts all around the place today i think we are in need of some clarification between large mineralisation and economical to drill.

Remember that gold is actually at a very high price and even if that could change, some area of Balabag is now economical to drill.

There is some hole where there were no mineralization at all and if I am correct this is where all infrastructures will be installed and built. Nobody would like to build that kind of infrastructure where there is the most gold. That would be silly.

Now, the results by themselves are telling me that they are ok and some areas are great. Unfortunately they will not and could not comment any further as they need a 43-101 to be included with any comments more than what was already said this morning on the press release.

One thing that strikes me is the 12 more holes since the cut –off date (June 30^th) and these are interesting. Why would you continue to drill unless there were in a very interesting area? Unfortunately TVI will not comment on these drill holes for legal reasons (and selective disclosures rules) but these seem interesting.

Now if they were to be in a higher range of grams per ton, I would not mind waiting 4-5 more weeks to get those drill holes included. Anyways, a 43-101 usually takes between 45 and 60 days to be produced.

But as far as I am concerned, their main objective of defining the 50,000 ounces to start up a bootstrap mine has been achieved. Now let’s go to the needed 43-101 report, start building the mine and we should see some gold going out of there somewhere at the end of Q4-2012. I mention Q4 because we never know what can happen and sometimes in the mining industry you get surprises. So instead of expecting large gold volume in Q3, I would imagine they will be under commissioning for the latest part of 2012 then the real thing will happen in 2013. (Remember zinc was a lot longer than expected even if they tried really hard to have it running at best possible % the first time. Mining is mining)

Without having all the facts in regard of the 43-101 it will be very difficult to establish for sure any economic data for that mine BUT I think that I could say that the price per ton to produce will hover around the 350-375$ per ton (again, we do not have the complete 43-101 and feasibility project) and they should be able to produce around 60,000 ounces per year (after commissioning) for a period that will vary between 6-8 years depending of gold price as the higher it is going to be even the lowest grade area will become economical and profitable. (Based upon original 43-101 and no added gold from the last drills)

But at 1600$ per ounce we are now talking about a project that will be over 500M$ IN PROFIT over the mine life is conditions stays at what they are.

Anybody that want to join the party is welcome !

ALERT TVI

Tvi has announce their drill results from Balabag.

http://www.tvipacific.com/Investors/news/News-Release-Details/2011/TVI-Pacific-Provides-Additional-Drill-Results-From-the-Balabag-Gold-Silver-Project1126024/default.aspx

More to come tonight