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KMW Blog Jun 9, 2016: Episode #1 - Searching for Rescue Candidates among Zombie Juniors starting with Letter T


Posted: Jun 9, 2016JK: Episode #1 - Searching for Rescue Candidates among Zombie Juniors starting with Letter T
Published: Jun 9, 2016ABR: Zombie Search and Rescue Mission for Junior Mining Stocks - Episode #1

The Zombie Search and Rescue Mission is a collaboration between Allan Barry Laboucan of AllanBarryReports and John Kaiser of Kaiser Research Online where the goal is to demonstrate the research of distressed juniors by using the KRO Search Engine and other KRO features to search for "zombie" companies and check them out in order to make a "yes", "maybe" or "no" decision as to whether or not the junior deserves to be rescued from the Zombie Wasteland. Where Allan and John are unanimous about a yes or no, that company will be tagged as a Zombie Rescue Target - Yes or Zombie Rescue Target - No. The rest will be tagged as Zombie Rescue Target - Maybe. The 3 zombie categories are available as Special Parameter criteria in the KRO Search Engine (the 3 links above are direct links).

Video URL Links
Updates:Sirios Resources Inc (SOI-V)5:30

Arizona Mining Inc (AZ-T)11:10
Prior Zombie Rescues:Adamera Minerals Corp (ADZ-V)24:20

Fjordland Explorations Inc (FEX-V)Mixed with Adamera
Episode #1 Zombies:Tajiri Resources Corp (TAJ-V)38:30

Takara Resources Inc (TKK-V)52:20

Tanqueray Exploration Ltd (TQY.H-V)58:15

Tanzania Minerals Corp (TZM-V)1:05:28

Tarku Resources Ltd (TKU-V)1:09:20

Tembo Gold Corp (TEM-V)1:15:55

Terreno Resources Corp (TNO.H-V)1:20:10

Tesoro Minerals Corp (TES-V)1:24:20

Thor Explorations Ltd (THX-V)1:30:06

Thunder Mountain Gold Inc (THM-V)1:33:09

Thunderstruck Resources Ltd (AWE-V)1:34:50

Tiller Resources Ltd (TIR.H-V)1:37:32

Tres-Or Resources Ltd (TRS-V)1:39:10

Tri Origin Exploration Ltd (TOE-V)1:41:44

True Grit Resources Ltd (TGI.H-V)1:50:66

Twyford Ventures Inc (TWY V)1:52:36

Episode #1 investigates zombies beginning with the letter T. Four juniors were tagged as yes and added to a couple other juniors flagged by Allan and John in earlier ABR interviews (Adamera Minerals Corp and Fjordland Explorations Inc). Eight were tagged as no and five as maybe. Episode #1 is two hours long because it introduces the concept. Every week or so Allan and John will tackle another letter and also check out how the rescue targets are faring. Several of the zombies turned out to be shells, some of which one day will do very well. One even turned out be suspended. These shells like the one controlled by Aziz Shariff are difficult to buy and do not need rescuing, but they sometimes are good off-ramps for Allan and John to talk about track records and industry issues. Their primary goal is to find zombie juniors will real stories and management teams that are liquid at cheap prices because management has so far not brutalized their shareholders with a rollback.

In checking out a zombie Allan and John are demonstrating to the audience how one goes about with preliminary research of distressed juniors using the core criteria: history, people, structure, capital and story. A zombie junior is defined as a company with negative working capital and little or no long term assets that could be sold to pay off liabilities, technically an insolvent company that is probably in violation of listing requirements. Although such companies have no ability to create new wealth, these persist as active listings like the living dead called "zombies". Some observers have called for a mass delisting of such companies which represent more than 800 of the 1,500 or so "resource" companies covered by KRO. John and Allan, however, disagree with this idea because there are some juniors who have ended up among the "living dead" due to bad luck and the circumstances of the severe resource sector bear market that began in March 2011 and ended in the third week of January 2016. While many of the afflicted zombie juniors are run by "life-style" management teams and truly deserve to disappear, others are run by real people and often have projects with stories that deserve to be revived. Through a lantern in the form of interactive use of KRO and a querying dialogue Allan and John try to figure out which ones deserve to escape the fate of Sodom and Gomorrah.

The rationale for doing so resides in the very cheap prices of these juniors often accompanied by good liquidity. This is far riskier than bottom-fishing which seeks 500% plus gains from resource juniors rising from the trough of a bear market. The 2016 Bottom-Fish 100 Index is up 137% from the start of the year as of June 9, 2016. Zombie Rescue Targets offer 500% plus gains just by achieving a normal bottom-fish valuation. The downside is that the stock gets suspended and never comes back for an instant 100% loss. John Kaiser monitors the Zombie Rescue Target list for possible additions to the 2016 Bottom-Fish Edition.

The Zombie Search criteria consist of "listed and trading companies," and "only resource companies" in the Special Parameters box, "less than $0.10" in the Price Range box, "negative $1,000,000 to positive $199,000" in the Working Capital box, and all the Project Priority boxes unchecked. The $0-$199,000 working capital range is included in the zombie definition because that is barely enough money to stay alive for another year, and in many cases the true working capital is negative because current assets include non-cash equivalents such as "receivables" that will never be received or "marketable securities" that have no bid. For this search to work one must be logged on as an active KRO member. If the search does not deliver too many hits, clicking "all pages" after the first group displays will display the entire list. The graphic above separates the the total positive and negative working capital of companies in each price range for 1,190 TSXV listed juniors featured in KRO. The scary number is that TSXV listed zombies trading below $0.10 collectively owe $1.6 billion while non-zombie listings below $0.10 have about $374 million in working capital.

 
 

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