Over the past 12 months this stock has traded as high as $7.80 a share. We saw the price nosedive this past Thursday due to heavy selling. It would be helpful to have the current facts on this company rather than a lot of conflicting information which causes me to wonder where the stock price is heading from here. Some who post here claim the price will drop down to ZERO and others claim it will soon be trading back near it's 52 week high. I'll admit that I haven't a clue because I don't know what the truth is regarding the claimed prospects for this company. Those who bought within the past two days are sitting on profits while those who have been holding TRX for months are now underwater. So is the best move now to buy, hold, or sell? I know what my current plan is, but I'd like to hear from others along with their supporting rationale. It appears that some here are either going to make or lose plenty of money with TRX in the months ahead. What are your expectations? SS
I would stake my reputation that Buckreef is only worth $3 million. The issue is pricing under uncertainty. Buckreef is like a lottery ticket where it is very difficult for investors to know the odds. The uncertainty is great, hence the need for a bankable feasibility study before anyone will even consider development. The auction process for the project tells the market what the option to develope the property is worth, not what the ultimate value of the project is after all the uncertainties are resolved.
I for one am extremely skeptical of meaningful surface gravel production as a means of financing for several reasons. All of the information about the property was available to all bidders. TRX management did not have any information that gave them an information advantage. The property was previously under production as a mine and the results were disappointing. If the surface rubles were more economically viable then previous production would have focused on extracting that gold instead. There may be small surface deposits to process but nothing on the scale to finance the $250 million required to bring the mine into production.
The real cost of Buckreef is $253,000,000, the $3 million for the license and the $250 million for studies and developement. TRX does not have that kind of money nor do they have access to that kind of funding. For TRX it is like buying a house in foreclosure, the purchase price is not the entire cost.
To clarify, my input is limited to the 4 values listed as estimates, whereas the other numbers/values are derived from statements by management and results of the variable inputs.
The 0.88 grams/ton and the US$250/oz. are estimates which I believe could be in the realm of possibilities for targeted Surface Gravel Production prior to the main mining operation. I will concede that the values were selected to show the possibility of fully funding the development of the mining operation with a contribution from STAMICO.
The other values that should get your attention are the values for STAMICO. To put them in perspective, consider the following:
$960,879,575 ........... Total Net Value for STAMICO
$74,250,000 ............. Net Annual Revenue for Stamico after "Development Cost" Payback Period
$112,000,000 ........... Total amount mining companies paid to the Tanzanian government in the 2008/2009 fiscal year.
What should be obvious, is that STAMICO has every incentive to facilitate and contribute to the success of the project, and from my perspective, I doubt that you would be willing to stake your reputation on your claim that the $3M award is a "reasonable proxy for the true market value".
My take is that STAMICO has blazed the trail and cleared the path of obstacles at the Buckreef project, and that TRX will have to get with the program starting this quarter if management wants to regain any credibility. My input values merely shows one way the vision that TRX management has painted can be achieved. I cannot fathom how there will be any delicate diplomatic silent excuses for TRX management with this one (which is not to say that there aren't still questions for which there doesn't seem to be any answer/excuse).
Lets start with your assumptions. 20 hrs per day really? The .88 g/ton is better than some of the drill results. Should I go on? $200 per oz cost. Don't forget they have to pay someone to supervise production and guard the gold. Buy fuel to run the equipment, spare parts.
My read on the article is that Tanzania couldn't get anyone else to completely roll over and take the project. A major miner would probably not agree to hire STAMICO employees and need to use STAMICO equipment. So yes they offered more than $3 million cash but that doesn't mean they prevailed over a higher cash bid from a well capitalized company that could get the project done with certainty. If TRX fails STAMICO simply rebids the project. In the meantime STAMICO bureaucrats look good they revived a failed project, extracted a better split than ususal, put people to work, and got a little cash.
My logic is that not all the parameters are known, hence "what if"; whereas you continually promote a definitive negative aspect based on the assumption that you know all the facts.
Well, does this:
sound like price was the only determinate for TRX being awarded the bid?
Sticking with my "what if" scenario, consider the TRX bid for Buckreef and the example ABG bid using this:
set of parameters, and let me know how you would view the bids if you were STAMICO.
My logic: Auction parameters including JV terms were set by STAMICO. Companies placed bids. Highest bidder won. Competitive auciton price is a reasonable proxy for the true market value.
Your logic: Significantly higher bid by a well capitalized and experienced mining company bypassed in favor of lower TRX bid with a different JV arrangement. 6 other bidders were not competitive.
Anyway a $50 million value for the project would still imply that TRX is overvalued. Your what if scenario would imply Buckreef is worth $0.50 per share. Stock is trading at $2.70.
Go ask ABG investor relations if they bid on Buckreef. Let us know the answer.
They have a fragile self-esteem and cannot handle criticism, and will often try to compensate for this inner fragility by belittling or disparaging others in an attempt to validate their own self-worth. It is this sadistic tendency that is characteristic of narcissism as opposed to other psychological conditions affecting level of self-worth.
To the extent that people are pathologically narcissistic, they can be controlling, blaming, self-absorbed, intolerant of others’ views, unaware of others' needs and of the effects of their behavior on others, and insistent that others see them as they wish to be seen.
The narcissist, then, is not able to acknowledge and accept his faults, which he always tries to hide: his 'idealized love of self...rejected the part of him' which he denigrates - 'this destructive little child' within. Instead, the narcissist emphasizes his virtues in the presence of others, just to try to convince himself that he is a valuable person and to try to stop feeling ashamed for his faults; unfortunately such 'people with unrealistically inflated self-views, which may be especially unstable and highly vulnerable to negative information...tend to have poor social skills'.
No, Jazzy I got it, I get it, and I'm up trading this POS 78% last year. When it comes to my money, I'm definitely narcissistic. Try it out instead of deluding yourself with the CC crowd. Yesterday was hilarious, the feeble minded and paranoid douchebags getting led around by their noses again and again vindicates most of what I've been saying for years. You clowns should organize an OCCUPY TRX AGM. BWWAHAHAHAHAHAHAAAAA!!!!!!!!!