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MFC Bancorp Ltd. Message Board

  • olgaoldenburg olgaoldenburg Feb 14, 2013 4:42 AM Flag

    Pea Ridge Mine in the news

    Source: website mysullivannews

    "Pea Ridge Mine Still Focused On Re-Opening Part Two Of ‘Pea Ridge Mine’

    Posted by SiteJudge on Feb 12th, 2013 // No Comment

    By James B. Bartle
    The future of Pea Ridge Resources, owned by MFC, Industrial, Canada, and Alberici Group, St. Louis, still remains somewhat in limbo as a number of studies are still underway or are scheduled to be done at the former Pea Ridge Mine.
    The Independent News spoke with Kevin McGrath, Cameron Associates, Inc., the media spokesperson for the project this week.
    A number of questions were presented to McGrath including, “How far along is Pea Ridge Resources on re-opening the Pea Ridge Mine?; Is there a target date for opening?; How long will it take to pump the water out of the flooded mine?; By going over the third quarter report, I understand there are a large number of reports and studies being made, is this delaying the progress of the mine as we are one year past the purchase by the two firms?”
    McGrath offered a simple answer to all seven questions that were presented to him.
    “It is very difficult to answer the majority of your questions before we have the answers to the studies,” said McGrath. “We are actively working on this process and once it has been completed and we have made some decisions we will share that with the public.”
    In going, briefly, over the 61-page, ‘Technical Report,’ on the Pea Ridge Resources mine conducted by Behre Dolbear & Company, Denver, CO, in August, the report does shed some light on the project and questions that remain.
    The report indicates, at the time it was completed, “Behre Dolbear performed a pre-feasibility study on the Pea Ridge Mine in 2007-08 that focused on a mining method and processing scenario that was being considered at that time. At the present time, the economic factors used in that study are no longer applicable and Pea Ridge Resources has not determined a production scenario for future mining.
    Under Recovery Methods, the report stated that when Pea Ridge Mine was operating, a standard magnetic separation process was used to recover magnetite and convert it to pellets. At this time, the company has not made decisions about how ore will be processed.
    The report did discuss the Social/Community Impact which read, “Sullivan is a community of some 7,000 people and has schools and clinics for doctors, dentists, and chiropractors. The area around the mine is also a recreation; resort area, which could also provide opportunities for temporary accommodations if needed. Unemployment in the area is high and Pea Ridge Resources believes that former employees would be willing and able to, again, work at the mine. At the present time, several former employees are being employed to catalogue historical data.
    The report did make mention that recovery efforts to collect ore from the surface is on-going at this time.
    The conclusion report stated, “Substantial mineralization is still available for production at the Pea Ridge Mine site, although presently, these are now in flooded condition. This economic viability of de-watering and bringing the mine back into production will depend on establishing the products that will be produced, their value, the size of the markets for these products and the logistical requirements necessary to transport these products to market.”
    It does appear, according to McGrath, that work is on-going on the Mine Project and that a number of studies have to be completed and analyzed over the next several months.
    McGrath did indicate to the Independent News that he would provide future updates on the project as they become available. He strongly understood the economic impact this project would have on the local economy if the mine was back in full operation."

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    • Olga...
      You got one heckava message dere by golly!
      Today's the cut-off for CML bids with 3/1 closing, eh?
      Rumors should start poppin' any time now...
      Rennie's gotta be getting the "fill-in-the-blanks" announcement
      ready for release sometime in the next week or so.

    • Source: SeekingAlpha website, Author: Stanley Barton

      "Advice For The Lovelorn Investor: 2 Stocks That Cherish Shareholders
      February 13, 2013 | 1 comment | includes: MIL, PMD

      Disclosure: I am long MIL. (More...)

      Financial advisors warn us against falling in love with our investments. That is easy to say, but most investments are based upon some enticing attributes that encourage passionate expectations. The decision to buy a stock is usually followed by jubilation that we were able to capture such a gem, but all too frequently that thrill does not last. If too many times the honeymoon with your new stock has ended prematurely, maybe the companies in this article can put the romance back in your investing.

      As an analyst, I fall easy for companies with high growth, big dividends or sexy businesses, only to discover after hours of investigation that the company has a dark side. Those short-lived affairs are frustrating, but not as heartbreaking as the unexpected disappointments from a company after the investment is consummated.

      Perhaps the most egregious of these surprises is when a company reports great revenue growth but the bottom line is penalized by huge management bonuses and salary increases. Just when it is time for the payoff to the loyal investor, management decides that they already have your money so they do not care about increasing dividends. Another common abuse of shareholders is the continuing issuance of diluting stock offerings to fund an unnecessarily larger operation, to satisfy the egos or justify the salaries of the CEO and CFO.

      The Beat of a Different Drum
      While PMD may let you sleep well at night, maybe you prefer the excitement of a little less predictability in your mate. MFC Industrial Limited (MIL) is a commodity supply chain company and owner of resources and royalties in iron and energy in particular. MIL is run by a gentleman named Michael John Smith, who has been compared to Warren Buffett in his unwavering insistence on true value when making a deal. He also insists that book value is the best way to evaluate his company, and the current price of $10.03 per share is a 20% discount to that value metric. A recent example of a Michael Smith deal is the timely acquisition of Compton Petroleum for about $32 million, while the June 2012 evaluation put the Compton book value at $224 million. The book value of MIL was increased sharply, but only after deducting conservative reserves for losses in the future sale of Compton's non-core assets.

      Part of the charm of MIL is the mystery. It is enigmatic in the complicated acquisitions and spin offs that are hallmarks of the company. While conference calls (usually from some exotic location) with Mr. Smith are intriguing, we always come away feeling wooed, although not sure why. The bottom line is that history has proven that the bold actions by the MIL management has resulted in a 15%+ annual return for investors. A thorough but mind-bending account of this history can be found in this Seeking Alpha piece.

      The focus of MFC is on becoming a global supply chain management company through the prudent acquisition of undervalued assets. Although Smith insists on book value evaluation of his company, earnings in the core business in the commodity and merchant banking business have been consistent enough to support a dividend that has increased in the past two years. The MIL policy has been to pay a better dividend than the NYSE average. The current MIL yield is 2.4%.

      MIL management is innovative and conservative at the same time. Great attention is paid to small details, belying the boldness of its acquisitions. Investors must take a leap of faith to join the wild ride as MIL marches to its unique drumbeat. That faith is not so hard to muster, given the history of 15% - 20% annual returns for stockholders and a management that insists on a better-than-average income yield. It is noteworthy that Smith's six-figure salary is reasonable for an active and successful leader.


      It is difficult to find attractive stocks that are not already winning the Wall Street popularity contest. If you have found that those sexy investments are prone to let you down, maybe you should consider investing in lesser-known companies whose management is committed to work in harness with their shareholders. You may find that they know how to perform where it counts."

      • 1 Reply to olgaoldenburg
      • Olga...
        Only problem with the article is the other stock mentioned has like a 6 million share float...
        That's pretty thin for a side-by-side promotion with MFC...
        I mean, even if we took a small position, we'd probably goose the price a couple bucks
        to get filled.
        I think we'll just pass at this point and pack a little more MFC in the portfolios.

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