Locantro’s Life: Gold Investment Symposium Comments – Day One

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Written by Tony Locantro, Author , Locantro’s Life Speculative Investment Newsletter

Compared to 2011 (when things looked much better), the crowd for this year’s Gold Symposium was well down. The event opened up with around 300 in the room, and the video skit with the blackberry, apple, oranges that ended with the “Eggs Box for $3.60” was very well received. Proof that a good “Dad joke” can work, although a couple of minutes of editing (take note Judd Apatow if you are reading this) would have improved the impact even further.

When crowds are on the small side it is the time to be “excited”, and when you attend conferences to pick up, the male pattern baldness rate is near an all-time low and the room is full of the “other” gold diggers it is time to be selling and concerned.

I MC’d around 75% of the event, and I admit that trying to juggle the technology, find a safe looking point not to freak the audience out and take in the talks was demanding and a struggle. Nevertheless I sat through every presentation and minute of the event and am happy to share some worthwhile observations with you.

RICK RULE SPROTT GLOBAL INVESTMENTS

Just pipped IMO as the best speaker by Sean Russo. Rick delivered a “Peter Lynch” (One Up On Wall Street) style talk that was informative, animated, and passionate and showed he clearly knows the mining business and more importantly what makes investors react the way they do. He discussed the stupidity of Business Weeks 1984 Call “The end of mining”, and how the key to success was to deploy capital aggressively during bear markets, i.e. NOW. From some rumblings during the lunch break it is apparent that Eric Sprott and Co is now loading themselves up on quality juniors. Mightn’t be true but someone suggested Eric is holding $250m worth of bullion personal account.

There was plenty of subtle humour, and the best jab he threw from memory was “Mining companies were producing copper for 80c a pound and selling it 

for 60c a pound but again they all tried to make it up in volume”.

In better markets I have no doubt Rick will be pulling much bigger crowds, and when he is surrounded by upper-middle bogans it will be another indicator we all should be selling. Brilliant speaker, all-round nice guy who gave everyone the time of day, and it was pleasing to see one key note talker not run away as soon as their duties were over.

JORDAN ELISEO ABC BULLION

Finally an economist presentation that didn’t put the audience to sleep. Jordan far exceeded my expectations, and where is talk resonated well with me was his observations on moves towards Australian’s leasing out rooms in their houses to adjust to rising property prices and the ridiculous cost of living. Rather than bore us with charts on figures that stay the same in every presentation, Jordan humanised his talk and gave realistic examples of how investors and the public are coping. As an X Factor judge would say, “Has a big future”.

OWEN HEGARTY G-RESOURCES

I saw Owen present at Noosa and at the Royal Pines so no surprises here and the slides looked very familiar. I was greeted with a Bio for Owen that was a page long so I ditched it and told the audience Owen was bullish and the audience will feel better following his presentation. Bullish on commodities, bullish on Asia, and flat out with his business interests.

NORTHERN STAR RESOURCES STUART TONKIN

I feel for relatives of the four Burgess brothers that play for the Rabbitohs (Well worth seeing Beau Ryan take these guys off in the NRL Footy Show) as I know of three Tonkin’s and called Stuart, Luke who is now with Silver Lake Resources. I felt like an idiot so I saw no harm in confessing my stuff up to the audience. On 18 May 2010 I wrote a research report for clients on NST at 6.3c and it ended up going $1.60 odd, so it was my last major win (apart from RDM’s 400% run in late 2012). Bill Beament NST’s MD made his way into BRW’s Young Rich List with $29m so I guess he can sit some of these events out. Whilst I follow NST, I am looking further down the market cap list for potential “market darlings” as NST was certainly one that paid off for us.

CHESSER RESOURCES RICK VALENTA

I was a bit concerned Rick wasn’t going to show after

looking out in the audience for him. Turns out he has simply lost an astonishing amount of weight (as fast as CHZ’s price decline).I know CHZ’s story extremely well, and it remains a STRONG SPECULATIVE BUY for subscribers considering we have 703,000oz and only 15% of the system has been drilled. (I will let subscribers do the calcs)

ATLANTIC GOLD WALLY BUCKNALL

If he wore a hat you could mistake Wally for an Air Canada pilot. It was seven long years ago that ATV got the environmental approval for Touquay in Nova Scotia, and as I mentioned to the crowd the project has been held up the Higgins family (Christmas tree growers), and we could have had the sequel to “The Castle”. ATV’s asset base is worth more than its market capitalisation and this is one of the best behaved gold deposits (metallurgy) on earth even with a lowish grade. The collapse of Liongold’s share price has removed the likelihood of a short to medium takeover, however there is a puzzle to be put together in Nova Scotia and ATV could yet be pulling the strings. BUY with money you won’t need for your kids school fees.

MICHAEL GRANT AND KIM O’BRIEN BDO

Running my business one out and often doing my BAS statements at 4.30am on the morning they are due, I despise tax with more passion than Lara Bingle and Sam Worthington.

I though this two show punch with Q&A’s at the end would struggle to keep the audience awake but I underestimated how well this went. From discussing trader or investor, collectables, not being able to wear your gold out in public in certain circumstances it was far more interesting than many would have thought. During the Q&A session I made a statement that during the next speculative bubble many punters would simply go out and blow up their SMSF’s and after it had burst the regulators would tighten the rules up long after the police had removed the IPhone speakers from the party. Michael and Kim disagreed with me, however at the drinks, Kim liked my idea about kid’s party invitations carrying Bpay references. Worth chasing this slide show up and I will see what I can do.

WHITE ROCK MINERALS GEOFF LOWE

Be careful when googling this company, as you may arouse some interest from the authorities. I have met with Geoff Lowe and have followed WRM from a distance and sub 4c rate this as being “stupid cheap” for the gold/silver project at Mt Carrington in Northern NSW. WRM have released a robust PFS and with an enterprise value EV of around $3 per gold equivalent ounce it is trading around 1/5 of its peers. It certainly needs a catalyst or a change in sentiment, but the risk/reward is very attractive.

GLOBAL GEOSCIENCE BERNARD ROWE

After I told the audience that the next two presenters surnames rhymed (stupid Dad joke), I commented on the potential for both WRM and GSC to perhaps have a race of so

rts to “Ten bag”. Based on what GSC have stumbled on in Nevada at Tokop I would put my money on them and even more so since GSC’s share price has come all the way back from 5.5c-5.7c on great news. Many are turned off GSC due to their boring name, but even stocks such as XERO (stands for zero profits but massive market cap?) can prove there is mo

re to stocks than names like horse races to pretty colours and numbers. VERY STRONG BUY around 3c but you are on your own when it comes to a sale as they have greater pullbacks than a 5yr old with a bag or Oreo’s.

SEAN RUSSO NOAH’S RULE

The mining industry could do itself a massive favour and watch how Sean Russo presents. I was blown away by Todd Sampson (the guy who wears the ill-fitting T-shirts on Gruen Planet), but Sean was right up there. An outstanding speaker who made hedging and risk advisory seem like a Victoria’s Secret swimsuit parade. I especially loved his chart on the “Beach house and school fees” cycle as I can relate at least to the school fees one. The beach house, well I remember the days of surfing at Mid Curl Curl when the area was “brownchip” but the thought of buying never interested me. Sean provided some fantastic examples on how “good” hedging saved and allowed many to prosper and where refusing to hedge due to potential shareholder perceptions got many into trouble. The best presentation of the conference for mine, and if you have the opportunity to see Sean present, put your leg over the other side of the fence.

THE PANEL DISCUSSION

Nothing really surprising here apart from the fact that the consensus told us that the gold price could go up, down or sideways and no one really knew when, why, if or how. Rick gave a few jabs on the stupidity of investors, whilst whatever Clifford Bennett had in his coffee to predict 4.5% GDP growth for Australia next year, “I will have what he is having”. Clifford Bennett is like Charlie Aitken (not Sheen) on speed. Was like a Cornetto with no real boring bits as you get towards the chocolate. Was more upbeat and lively than 2012.

Tony LocantroTony Locantro
Author
Locantro’s Life Speculative Investment Newsletter
http://locantro.com

 

 

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Precious Metals Investment Symposium