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Kaiser Media Watch Blog - July 1, 2016 to July 31, 2016
Kaiser Media Watch Blog enables John Kaiser to share online content from other media he deems interesting or relevant to Kaiser Research Online audiences. He collects links to such content and writes a brief explanation. The KMW Blog gets updated during the evening KRO update. After a week or so the current KMW Blog gets archived and a new one is started. Tweets are sent with a link to the item in the KMW Blog when it is of particular interest. Right clicking the JK header allows one to share or copy a link directly to that specific blog post.
Episode #4 investigates zombies beginning with the letter O which yielded 5 zombies as of July 15, 2016. One junior was tagged as yes, two as maybe, and 2 as no. Episode #3 kicks off with a discussion about Nevada Exploration Inc (NGE-V: $0.42) (currently a bottom-fish pick), a favorite recommendation of mine since 2008 that turned into a zombie in 2015. I was able to organize a rescue mission in August 2015 which unfortunately involved a 10:1 rollback. However, the story is very much alive and now back on track with the recent completion of a $1.75 million financing at $0.35. NGE has become a sponsor of ABR so Allan could not resist asking me my opinion. Episode #4 finishes off with a discussion about Peregrine Diamonds Ltd which horribly botched its Chidliak PEA conference call on July 12. I had to follow up my SVH Tracker - July 7, 2016 analyzing the PEA with another, SVH Tracker - July 12, 2016, that explains the screwup.
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. For more background see KMW Blog: ZSRM Episode #1.
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). The table below does not tell you what the judgment was, but it does take you directly to each zombie's segment. Those who are full KRO members are urged to check the links above to see which zombies ended up where, and use the table below to find the segment where that zombie is discussed. (First Time Registrations or Returning Members.)
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" ranges in the Working Capital box, and all the Project Priority boxes unchecked (the companies with no projects will otherwise not show up). 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 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. For more background see KMW Blog: ZSRM Episode #1.
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). The table below does not tell you what the judgment was, but it does take you directly to each zombie's segment. Those who are full KRO members are urged to check the links above to see which zombies ended up where, and use the table below to find the segment where that zombie is discussed. (First Time Registrations or Returning Members.)
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" ranges in the Working Capital box, and all the Project Priority boxes unchecked (the companies with no projects will otherwise not show up). 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.
Episode #3 investigates zombies beginning with the letter L which yielded 6 zombies as of July 7, 2016 (there were 7 but one escaped our scrutiny by jumping to $0.11 the day before). Two juniors were tagged as yes, none as maybe, and four as no. Episode #3 is only one hour long and includes a look at some of the zombies tagged for rescue in the earlier episodes. It finishes with a brief discussion about Peregrine Diamonds Ltd which published its Chidliak PEA that morning. The PEA's after-tax NPV at CAD $471 million came in somewhat lower than the $700 million projected by my most recent Outcome Visualization for Chidliak which I have now retired. My SVH Tracker - July 7, 2016 analyzes the PEA.
On Thursday June 30, 2016 Allan Barry Laboucan interviewed me for two hours about the Spec Value Hunter and Bottom-Fish picks that have I focused most of my written recommendation attention on. The turning point for the 5 year resource sector bear market that began in 2011 was the third week of January 2016. The 2016 SVH Index, consisting of 13 formal buy recommendations, is up 106%. The 2016 Bottom-Fish Index, consisting of 100 bottom-fish which are informal accumulation targets, is up an embarrassing 180% from December 31, 2015 when I assembled the list.
The resource sector rally that began in late January should have paused ahead of the July 1-4 long weekend, and descended into the summer doldrums, with a rebound in September. Instead, on July 4 when American brokerage firms were shut for Independence Day, TSXV volume jumped from 156 million on June 30, the day of the interview, to 204 million shares. That is lower than the 302 million the TSXV hit on April 19, but nevertheless very impressive as we head into summer. The resource sector has successfully violated the PDAC Curse in Q2 of 2016. The question now is if it will continue to violate the PDAC Curse as it did in 2009 when the market ran until PDAC in 2010. Although the PDAC curse manifested itself in Q2 of 2010, when things were supposed worsen with the summer doldrums, the market in Q3 of 2010 blazed to even greater trading volumes and financing value before hitting the wall created by the Tea Party blockade in Q2 of 2011. The Tea Party mindset has been reborn today as the driver behind the Brexit Leave vote, and the ascent of Donald Trump as the presumptive Republican nominee to challenge Hillary Clinton for the White House in the November presidential elections. Whether it is Trump the disruptor or Clinton the defender of the status quo that ends up in the White House, fear of instability and uncertainty will not diminish (see my Kaiser Blog June 23, 2016: Brexit and the Bundle of Sticks). It will escalate because there are no simple answers to the stresses created by globalization. Precious metals demand is one area that will benefit, but so will other metals as end-users start to think about where they will procure their needs when supply lines get disrupted by domestic strife, international conflict, or protectionist measures.
Not every Bottom-Fish or Spec Value Hunter pick has rallied. Investors returning to the resource sector only now may have missed the early departures, but not every captain has pushed his boat out to sea. There are plenty of seaworthy resource juniors still idling at the dock, or sailing away slowly enough that making a leap to get on board is not foolhardy. Newcomers can register with a First Time Registration and past members can Renew Here.
