Gold Mining

Points are well-taken. Any recommended sites on gold and other mining stocks?

 

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It's more than the classification. What bothers me more is that very little money is going into developing any sort of mining assets. Most of it is going into payments to insiders in the form of management fees, consulting arrangements, and closely held debt servicing.

 

I bought Wynn when their financials looked just like that. Same issues. Most startups have large management fees, look insolvent, have closely held debt servicing, have burndown ratios, etc. I trusted Steve Wynn and the SEC protection on that one because it was not a penny stock. Financial numbers do not tell you much on startups, you have to rely on management, reputation, product, and SEC governance.

Owle, I would just look at regular stock reporting services, (I use my broker services), and review financials, PE, analyst reports, etc. I will disclose I invest in a couple of the companies I listed but not all, but I think all I listed would be 1000 times safer than penny stocks. It depends on whether you are more of a lottery or steady investing kind of guy. I don't like putting "real" money into lotteries, especially the penny stock lottery.

 

The operators here are not Steve Wynn, or even Rob McEwen. Wynn put the effort into licensing and building. These guys are doing very little exploration or development. There are probably 1,000 of these small companies sitting on old mining claims while paying themselves to do so, and perhaps one will eventually turn into a mine. This one probably isn't the one. Maybe your success with Wynn has skewed your view of the odds.

"Mr. Taylor, our President and Director has no prior experience in the mining industry and despite the fact that Mr. Stevens has 13 years experience in the mining industry, his experience is limited to prospecting and soil sampling and core splitting. Mr. Stevens has experience with environment mining issues, however, he lacks technical training and experience in starting or operating a mine and his exploration experience is limited. "

 

Mining Stocks

You're right, you have to do your research or pay someone else to. There are some advertisers at Coin Talk who recommend such stocks with sound data to support them.

On "Coastal Pacific Mining", I read this hatchet job yesterday: http://www.timothysykes.com/2010/11...se-13-year-old-data-to-claim-1-billion-value/

There are others...

 

Not skewed my thoughts Cloud, I wrote in the post that these penny stocks are not long term investments. I was talking specifically on how Wynn's SEC filings looked versus this company's filings at the point in time when I invested. I was commenting on your post concerning your viewpoint that they were insolvent. I could name numerous other startups that I have reviewed financials for. Financial Statements for startups are not terribly indicative of long term success, you must dig much deeper than such superficial filings and understand WHY classifications have occurred, WHO is running the company, and WHAT product are they trying to produce. You understand that, by subsequently posting information about the officers.

I completely agree with your statements concerning these companies, this one, etc. I always wonder how we really have similar views why it seems we disagree so much.

 

I made about 3x my investment in Luna Gold Corp. This was 2 years ago... so I'm not sure how they are doing today. But I did well. http://www.lunagold.com

 

Luna at least appears to be a real company with infrastructure and gold deposits.

 

I don't disagree that it may be okay to be an investor in a startup, but if the company is technically insolvent, I would want to be a debtholder and not an equity investor because the liquidation preferences and conversion features in the loan covenants normally wipe out the stockholders in these situations. I don't think there are many exceptions.

 

I think it will quickly get too technical for eveyone else Cloud, but I could go over levels of insolvency, preclusions for GAAP treatment of accounts, the fact that debt on startups is actively managed debt, not subject to bonding, etc. Too boring for most I would think.

Anyway, point is most people do not understand these penny stocks enough to make informed decisions on them. Therefor unless you have insider information then you are subject to a 100 different stock manipulation schemes that have been around since the late 1800 railroad days. Read about railroad stock ownership and other stocks back then and see how many robber barons REALLY made their fortunes. Same is happening today in penny stocks today, just not as brazen.

 

I agree.

 

Here is another that is on my watch list. Up almost 8% TODAY.

Hecla Mining Co NYSE HL