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No Prisoners! Follow-UpMike Hoy This is telling
me that the knowledge of the precious metals investor is growing.
Congratulations, this is telling me loud and clear that things
are changing and the future looks very bright for those who have
taken the time to better themselves and their financial future.
Knowledge is a very powerful weapon when dealing with circumstances
and situations that potentially have life altering consequences.
The best thing that investors, coming into these sectors today,
have going for themselves is the timing of their entrance. One
of my most destructive weaknesses of the past, has not been the
knowledge of what the future may hold but the timing and discipline
necessary to know when to act. For twenty years our nation and
world have been moving in the direction that is the most detrimental
to society and its people. This is like the man who gets lost
that won't stop to ask for directions and eventually finds himself
in a life threatening encounter. All this under the disguise
and deceit, by our leaders, trying to convince us that they know
where they are going; when the truth of the matter is they could
not be more lost. This article and "No Prisoners" are so very important because they are examples of everything that I believe and have been attempting to teach others. Knowledge, homework, an open mind and belief in oneself are so very important. When you put all these ingredients together in a mix the finished product is an intelligent investor. Patience is the final discipline that bridges the gap between corrections and future bull market renewals. A classic example of this is the three companies I talked about in my Half Price Sale follow-up article that I wrote in May. In this article I wrote about Admiral Bay Resources ADBRF, adb-tsx.v, NovaGold NG and Golden Phoenix GPXM. Guess what people? These are still the three companies that I am most enthralled with today. I follow my companies very closely. I have done my homework on these companies and I could not be more excited about the future of these three companies. I believe they are true pioneers in their own fields. I haven't reread my Half Price Sale follow-up article lately but I suspect that everything I wrote in it is still applicable today. This is how I invest in companies. I do not want to trade; traders do not make the big money. They deny themselves the opportunities to hit homeruns. I want to take full advantage of the knowledge I have gained from the past when gold, silver, oil and gas stocks exploded in the late 1970's and early 1980's. Again, I want
to repeat the fact that if gold breaks out to new all time highs;
gold and silver stocks will be trading at a minimum of 5X to
10X their current prices. This is one focus of Mike Hoy. I want
that gain in my portfolio and I want to realize it as a long
term capital gain. I could care less whether I own a stock at
$1.00 or $.75. I know that I will look back as I sell for $10
or $15 per share and recognize that I had some pretty timely
purchases. That $.25 difference in price won't make a bit of
difference as I laugh all the way to the bank. My only concern
is the number of shares I have accumulated. I have made some
pretty good choices since 9-11. I have taken money and parlayed
it into positions that will definitely put a permanent smile
on my face when the time comes to cash in. Remember: the biggest
mistake you will make is the mistake of knowing when to sell.
I will assure you that many of you will lose sight of the final
goal and sell your stocks way to early when the time comes. If you understand the potential of your investments it is easy to put a future value on their stock appreciation. Whether your stock price is too high or too low is irrelevant; time will show the answer to that question. The point to this is the fact that if you understand the future potential of your company then you will be able to easily survive the corrections and if you are in a position to add to your positions as these corrections come along this is the opportunity to safely build positions when you know and understand the fact that the mistake is being made by those who are selling their stocks. Knowledge is a very valuable tool to possess. As your profits mount confidence is acquired without really having the knowledge of where it came from. This people; is the secret to wealth. Now it's my turn to share a little knowledge with you. ADMIRAL BAY RESOURCES This is a company of particular interest to me. I believe that this company walked into the opportunity of a lifetime. When Mark Brennan teamed up with Steve Tedesco the already bright future of ADBRF exploded like the sky on the Fourth of July. Mark has done a fantastic job of bringing undeveloped assets into this company. When the potential of the Coalbed Methane Project at Moose River is understood as well as the Monte Del Favor gold and silver project in Mexico the fact becomes apparent that either one of these projects could create a successful company in their own right. The potential of these projects is immense. But this is not what excites me the most. What excites me the most is the fact that I can talk about ADBRF in a manner that is so much more valuable, on the short term, than the potential of Moose River and Monte Del Favor. Every good junior has potential; ADBRF has something much more valuable than potential. Admiral Bay has cash flow. Yes read that again; Admiral Bay has cash flow! They have just crossed the point in developing from a company with potential to a company with cash flow. This is a huge development in the growth of a company. Cash Flow is the life blood that flows through the veins of corporations. With cash flow the potential of companies can be realized. If you are not excited you should be because the projects in this company can be huge. Where is the cash flow generating from? Oil and gas, specifically gas wells, in Kansas and Utah. Steve Tedesco has done an excellent job of identifying and acquiring assets that are going to provide the cash flow to develop this company. ADBRF is in the process of hooking up twenty gas wells, as I write, in Kansas and Utah. There was a news release put out on the progress being made in Kansas and Utah. For those of you who missed it, you can find it on the ADBRF website. www.admiralbay.com. ADBRF has the opportunity to make a huge name for itself in the oil and gas industry. The cash flow of this company is growing each and every day. There are some very good people associated with this company. I too hope to be one of them. I live in Linclon Ne. and the Kansas properties are straight south of me. I had the opportunity of joining Steve in the fields. I was very impressed with what I saw as well as the people I met. There are going to be a whole lot of oil and gas wells drilled over the next few years. With Steve in control of the oil and gas operations the shareholders of ADBRF could not be in better hands. Hats off to you Steve. I was a broker in the late 1970's and 1980's. I was introduced to just about every oil and gas program on the street. These tax shelters hoped to give your investment back over a four year period. Very few investors ever received their investment back. It is still too early to talk about the returns per well but I think I am safe in saying that these wells, on a bad day, will return the invested capital on a per year basis. Where can capital be invested to have this type of return today? Do you see why I am only looking forward when it comes to ADBRF? What will ADBRF be worth when there are 50-100-150-250 wells producing oil and gas in Kansas. When I see the established cash flow numbers these wells will produce, after they are all hooked up and the kinks worked out, I will be able to put some numbers together. I will share the fact that I think ADBRF could generate cash flow in excess of the total market cap. of ADBRF today within the next three years. Now how many times cash flow does a gas company trade at? Get the point! I would love to be more specific but cash flow just started and it is still too early to tell. Any of you who think this is a poor investment and want to sell you just let me know I will be glad to steal the shares from you at these prices. You say your charts tell you what? I believe your charts are lying to you; they are probably buying your stock on the other side; I know I am. Now the negatives: most of these involve the shareholders who do not understand the direction of ADBRF. This company has been built on the potential of Moose River and Monte Del Favor. I am sorry that these two properties appear to be in neutral at this time. Does it make sense to spend cash flow and capital on "potential" when that same cash flow can be put back into the ground to create more cash flow? I like cash flow a whole lot, in fact cash flow is my second point of focus. Do not become disillusioned, the time will come when those projects will be back in the limelight for those of you who have purchased ADBRF for the sake of Moose River and the huge silver reserves of Monte Del Favor. As wells are drilled and hooked up in Kansas the cash flow of ADBRF will grow dramatically and this will be the capital to unlock the potential of Moose River and Monte Del Favor. Do you realize that this will keep dilution of shares to a minimum? When ADBRF is in a position to fund itself internally this is as powerful a position as a company can be in. Great job Mark and Steve. I believe there has been stock in the market as a result of the lack of understanding on how thinking has changed in the last year. I know all you silver fans are disappointed but don't worry you now have one heck of a natural gas company. Natural gas prices are at very opportune levels for any company selling natural gas. I cannot think of a better industry to be in right now. The necessity to develop natural gas resources in this country are on the lips of everyone. Next time you see an article on natural gas pay attention. It is an absolute necessity for the US to develop its natural gas resources. What a perfect time for ADBRF to enter the business. Outside of these things there are only the inconveniences of running a company, too much rain in Kansas, getting the taps in place and hooked up. These inconveniences shall disappear just like any problems that develop in our everyday lives. In other words things look great and it's full steam ahead. Yeah, I love it and you will to as you gain a full understanding of the story as it develops. Go to the website and read. Curt Huber has done an excellent job with the website. Thanks Curt! NOVAGOLD If I could only own one gold company or I only wanted to own one gold company this would be it hands down. I have been amazed at how this company has been overlooked in the markets. I know that NG was the best performing stock on the Toronto exchange a couple of years ago. Funny thing is they had more respect then than now. I just love it. I know that anyone who sells this stock at today's prices is making a huge mistake. What more can you ask for out of a company? Rick and Greg have done a phenomenal job of creating wealth in this company. Just think for a moment about the possibility of three world class properties developing into three world class mines. Think about that for a moment; not one, not two, but three. Very few companies ever have the opportunity for one let alone three. If I know these boys; I think they have more up their sleeve too. If you don't own this stock you have missed the boat. Read their annual report. They talk about mines not properties. Some of you in the past have commented about the fact that they have no production, yet. Well you're right, they have no production, but they will in early 2006. The Rock Creek Mine will come into production and will produce in the neighborhood of 100,000 oz. per year. They will continue to develop additional production from that area over the next year or two. This is where the production starts. So for those of you who feel that production is the only game in town then you should take the time to learn that production is the name of the game with the properties in NG. I won't go into the depth of what they have; NG just had a news release bringing the public up to date on their drilling activities. www.novagold.net I am very impressed.
They are spending millions this year on drilling. They are still
trying to find the outer boundaries of their ore bodies. Think
about what that means. I think you should realize that these
are very large bodies of ore and the current drilling programs
can only increase the reserves of this company. By 2010 the possibility
exists for NG to be producing 700,000 ounces of gold per year.
Do not forget that NG has terrific copper resources. This is
a terrific story. I love the fact that they are proving up all
this gold as the price of gold continues to climb. I have to
believe the price will be substantially higher when the time
does come to take it out of the ground. I view my holdings in
NG as a bullion position that continues to grow each and every
year. I have noticed in the ads, that NG runs on several of the
websites I read, that there is one third of an ounce of gold
behind every share of stock. That equates into owning one ounce
of gold for every three shares of stock you own. No one can steal
this gold, no storage costs, no insurance cost and when the time
comes to sell it I think that gold will probably be trading at
new all time highs. This is perfect timing as far as I am concerned.
As the major gold and silver companies use up their reserves
they will be forced to spend terrific amounts of money on exploration
and development or buy those juniors who have been successful
in developing resources. Study the reports on NG; learn about the gold per share ratio; learn about the copper per share. Once you have done this then get your calculator out and start adding things up. You should see what I see. We have terrific value in this company and it is growing everyday. As gold prices break out and the street finally realizes the manipulation game is up, I believe there will be a mad rush to buy companies like NG. Every stock I own is for sale at the right price. The price of NG is no where near where I would consider being bought out. In my opinion, 5-10X today's price might be in the ball park three years from now. As we continue to prove up reserves from the drilling that is currently underway and the drilling that is to come; and as pre-feasibility, then feasibility reports are completed I believe that the price of NG will skyrocket upwards. Remember, gold production is peaking and few good quality reserves have been found to replace the used up resource bodies; this means that companies, like NG, who have been very successful in the discovery and development of new gold, silver and copper resources shall be very important in the replacement of the resources that no longer exist in other companies. I know one company that has done its job. Now you do too. Wanda and I have substantial holdings in NG. I first started buying it at $1.44 on 1-9-02, I wish I could have bought the stock earlier but I was slow because I missed it below $1.00. I wish I would have been introduced to the company when it was $.15 per share. I would have bought a lot of it. How do you think I gained the knowledge of what it is I write about? When I look at the purchase I made on 6-18-03 for 15,000 shares @ $2.15 I know exactly what I am talking about when I say buy the weakness. This price turned out to be the absolute bottom on the stock. The guy who sold it to me probably burned his charts up after that. This is exactly what I mean by knowing what is going on in your company. Yeah, I was frustrated that the stock was less than half the price of where it had been. But I knew exactly what to do; funny thing is I did not see anyone recommending it. I just wish I had some extra money when it fell back to $3.50 just recently. Once you begin to play this game to win, you then can adopt an entirely different mind frame and philosophy to investing. You bet; shoot the prisoners! This brings me to my last position of size. I kind of hate to tell you about it because I would like to add more to my position. I have done a little buying but I would like to buy more. GOLDEN PHOENIX MINERALS, INC. Now go back and reread the paragraph about the NG I bought @ $2.15 on 6-18-03. This is GPXM right now. Sometimes there is no logical explanation for why there is weakness in a stock. In the case of GPXM that is the exact position we are in now. I am down over half on my investment here. Big deal; so what? Who cares? I don't. The only concern I have is to take advantage of the opportunity that I am being presented with today. GPXM could increase 150% and still not see the old highs. The people who are selling this stock are making a huge mistake. They should be selling something else to buy more of this. GPXM is producing about 600 ounces a month gold from its Mineral Ridge Property. Mike Fitzsimonds had hoped to be at 1,000 oz. per month by now; haven't got there yet but it could be on the way. A mill is being purchased and permitting is underway. If all goes well we could be producing 4,000 oz/mo. by this time next year at a cost of $200-$220/oz.. Now it seems to me that this is moving in the right direction. Remember that cash flow I was talking about with Admiral Bay. Seems to me that we have cash flow here too. Do you see a game plan here from Mike Hoy. Yeah, I like cash flow. Cash flow separates fact from fiction! With cash flow I can eliminate a lot of risk from my investments. GPXM also owns a 60% interest in a joint venture project to produce molybdenum. Moly sells for roughly $14/lb, we have 3000-4000 tons on the ground with a 2.5-3% moly content. That works out to be $14 X 50 lbs = $700/ton revenues on 2.5% and $840/ton revenues with a 3% grade. The cost to produce this moly is cheap. A 100 ton/day mill is in the works; see the cash flow; 100 X 50 lbs/ton = 5000 lbs/day X $14/lb = Revenues of $70,000/day X 60% interest = Revenues to GPXM of $42,000/day for GPXM. If I remember correctly we have a resource of roughly 140,000 tons in the ground. The moly is a very valuable asset to have and this is high quality moly; with any luck at all it should be producing at 100/ton per day in the first quarter of next year. Do you see the cash flow I see? The only problem I see in GPXM is the amount of shares they have outstanding. That is the overriding reason for the weakness in the stock. With 110,000,000 sh. out. there is a lot of float on the street. That can work both ways though. If the stock is gobbled up by investors, who understand the story, at these prices then the stage is set for the future where there will be less shares in the float. Remember what I preach, "it is not important to own a stock that appreciates 10X in value; what is important is the amount of shares you own!" You can buy a whole lot of GPXM at these prices. My whole point here is to help you understand that the future looks pretty bright for all three of these companies. I could care less about what happens to the price of their stock in the short term. I did not buy them for the short term and as long as the companies continue moving forward in the manner that they are; I am very happy. You should view all your holdings in the same manner. If you do not see the future for them that I see for mine then I would make some changes. Weakness is an opportunity when viewed in the pre-text of what I am trying to help you understand. There is so much more to each of these stories that it is impossible to write it in one article. I will probably single them out individually in time. Now you understand why I am not too fond of the technicians. Technicals are important; but to classify all stocks in the same category, because of a chart pattern, is just plain stupid. If you know and understand the future of your companies you will recognize the opportunities as they come along. Unfortunately, they do not come along that often. This is why I am here and I write. I may not always be right but I call em the way I see em. Right now I see em pretty clear. The more you know about your investments the more at ease you will be when the time comes for a correction. My experience has taught me that some of the best performing companies did so as a result of the loyalty of their shareholders. My money is where it is because it makes no sense to have it anywhere else. I am putting together an e-mail list where I can keep my readers up to date on the events and progress of these companies as well as others. I do not charge for my opinions so take advantage of an opportunity from someone who puts his money where his mouth is as well as reveals his own personal positions. There is so much happening within these companies that I feel you will really enjoy my updates. Something else I am toying with is the idea of forming my own group of investors to take advantage of situations like Admiral Bay Resources and Golden Phoenix. If you have any interest get in touch with me. I feel there is terrific opportunity in today's market and I would very much like to take advantage of it. I am easy to reach as I work out of my home, feel free to call. tel: 1 402-483-4484
I have not been compensated for the writing of this article by any of the companies mentioned within. The possibility does exist that at some point in the near future I may have a working relationship with Admiral Bay Resources. Wanda and I do own positions in each of the companies mentioned above. The above opinions are the opinions of the author. 321gold Inc
Miami USA |
