Thursday, October 14, 2010

CIBC: Los Azules, Minera Andes and TNR Gold in the report: The Next Leg of Growth In The Copper Supply Chain TNR.v,,, CZX.v, ABX, FCX, BHP, TCK, BVN, AUY, RTP,,,,,,,,,,,


  We are wholeheartedly agree with CIBC: Be Long What China's Short. M&A will drive this sector activity and we have just a few quality juniors with large copper deposits to go after. In this report, we found particularly very interesting the different valuations in the takeover scenarios, presented overall picture of Supply and Demand and qualities, which Chinese buyers are seeking in the potential partners.
  Los Azules emerges in this light as a very important Copper deposit with a lot of upside in its valuation among the leaders in this particular quality, relatively high CAPEX requirements, but in the solid middle or to the higher band in a lot of different investment metrics compare to the other juniors in the analysis provided by CIBC.

  It is very important that, according to CIBC report page 42, legal claims of TNR Gold are communicated properly within the industry now.  Junior can fully rely on its litigation strategy, court decision or potential out-of-the-court settlement, should Minera Andes decide to clean the house before calling the real estate agents.
  We will always leave it to the lawyers and court to decide - who owns what in this case in its proper time.

  Copper is going up and the deposit is growing - we guess that nobody is in a hurry here. Argentina will become more fluent in Mandarin and the value of every lb of Copper in the ground will go up - to reflect fundamental picture described in the CIBC report.
  It will never be easy and there could be a lot of legal and market tricks along the way, but we are looking forward to the new exploration season on Los Azules and with every new printed dollar and every new drill hole on this property the value of Los Azules will be going up.

  With our publishing interest in markets, companies and global trends, we can never miss the opportunity to study the distortions in the market place - they can create arbitrage opportunities, when the real value of the asset is not reflected in its market price.

  For some people investment world is a business with legal rules to follow, personal dignity and responsibility, for others - it must be a pure fun. In case of TNR Gold we can hardly hold our smile - the market cap and liquidity in this junior micro cap does not, normally, suppose involvement of hedge funds and market makers. We will not talk today about any market manipulations, but we found it is very interesting, that this company now has a devoted market maker from Scotia, which is carefully closing every trading day at the bid with the last minute sale of 500 shares.

  We guess that for every seller there must be a buyer.

Recent Trades - Last 10 of 39

Time ET Ex Price Change Volume Buyer Seller Markers

15:33:52 V 0.215 -0.025 500 1 Anonymous 85 Scotia K

15:15:38 V 0.22 -0.02 8,000 79 CIBC 79 CIBC K

15:12:18 V 0.215 -0.025 2,000 79 CIBC 7 TD Sec K

15:09:34 V 0.215 -0.025 500 85 Scotia 85 Scotia K

15:09:34 V 0.215 -0.025 4,500 85 Scotia 7 TD Sec K

15:04:20 V 0.21 -0.03 500 14 ITG 85 Scotia K

14:57:35 V 0.21 -0.03 10,500 14 ITG 59 PI K

14:57:35 V 0.21 -0.03 21,500 33 Canaccord 59 PI K

14:37:19 V 0.21 -0.03 500 33 Canaccord 85 Scotia K

14:09:26 V 0.21 -0.03 500 33 Canaccord 85 Scotia K

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advise on this blog and there is no solicitation to buy or sell any particular company here. Always consult with your qualified financial adviser before making any investment decisions.

"We have a very interesting news from London this morning: apparently Minera Andes has settled the lawsuit with Hochschild over the loan arrangements for financing the San Jose Gold and Silver mine in Argentina. We do not have details yet and do not know about "who won and who lost" in the settlement - it is not so important - the important fact is that Rob McEwen has made out-of-the-court settlement, we were talking about here, and we hope that the next one, this time with TNR Gold regarding the Los Azules and Escorpio IV will be done as well soon. We have a feeling that it is the first news to come from what seems to be called by investment banks as packaging the assets. With cleared legal overhead the stock could easily revisit CAD2.0 with recent Gold, Silver and Copper prices. Drills will be turning on Los Azules soon as well, providing more food for imagination about potential bid for the Los Azules or maybe even for the whole company. We hope that fair settlement with TNR Gold will confirm Rob McEwen's "shareholder friendly" status and this deal will allow Minera Andes to enjoy the proper valuation of its assets.

"We have today fireworks with another junior: Minera Andes surges 18% on volume to 1.11CAD. Globe has run an article about potential takeover targets in Copper space recently:

"Globe says Minera, others could be takeover targets Minera Andes with its huge Los Azules copper deposit in Argentina is primed for M&A play with rising Copper price and Chinese appetite for commodities, will be interesting to see what will happen with TNR Gold's legal claims on part of the deposit and whether Rob McEwen will be ready to make a deal with this junior in order to consolidate the project and appreciate full upside of the valuation in any potential deal. He values Los Azules up to 375 Mil in his "imprecise estimate of value"

And yesterday Rob McEwen has announced:

"Rubicon Announces Secondary Offering of its Common Shares

Press Release Source: Rubicon Minerals Corporation On Thursday September 16, 2010, 7:20 pm EDT

VANCOUVER, Sept. 16 /PRNewswire-FirstCall/ - Rubicon Minerals Corporation ("Rubicon" or the "Company") ( - News) announced today that it has filed a preliminary short form prospectus in all the provinces of Canada except Quebec in connection with an overnight-marketed secondary offering (the "Offering") by Evanachan Limited and McEwen Trading LP (the "Selling Shareholders"), entities owned or controlled by Robert R. McEwen, of 45,714,357 common shares of Rubicon owned by the Selling Shareholders.

The Offering will be priced in the context of the market with the final terms of the offering to be determined at the time of pricing. It is intended that upon completion of the offering, the Selling Shareholders will own no common shares of the Company. Rubicon will not receive any proceeds from this Offering. Closing of the Offering is expected to occur on or about October 5, 2010 and is subject to certain conditions, including the approval of the Canadian securities regulatory authorities.

Mr. McEwen has expressed his continued confidence with the Company but advised the Company that it has grown to represent a disproportionate share of his portfolio for an investment where he is not actively involved in management, and he noted that this step is designed to focus his interests on the companies he runs, U.S. Gold Corporation and Minera Andes."

We can only guess whether the share price spike today is due to the Rob McEwen already buying or he will finance the next round of exploration in the company. Stretched between two lawsuits with both major company assets: with TNR Gold on Los Azules and with Hochschild Mining on San Jose mine, it will be difficult for the company to achieve a proper valuation for its assets, but now we have a hope that company will not miss this exploration season and Los Azules will continue to grow. With every new drill hole expectations about the value in the ground will be rising with the size of the deposit, high grade core will provide a much better return of CAPEX - we are surprised that Minera Andes has not attempted to settle the legal cases and clear the titles of its properties before this run in Copper, Gold and Silver.

We will refer you to Minera Andes presentation.

Above is the Los Azules deposit map with Xstrata property above grid line 65559000, this property is subject to TNR Gold back-in right of 25% according to Statement of Defence by TNR Gold below. Below is map of Los Azules ore body presented by Minera Andes - the largest part of the mineralisation and high grade core is above grid line 6559000 on the Xstrata property, which is subject to litigation between Minera Andes and TNR Gold now.

It is important to note, that not a lot of people are reading documents these days: according to the Statement of Defence by TNR Gold, company claims that it has the back in right into the Northern Half of Los Azules (not all deposit) of 25%, which could represent more than 12.5% of total deposit as a "metal in the ground" - with the bigger part of high grade core on its claimed grounds. Every lawsuit has an inherited legal risks for all parties, please read Minera Andes latest MD&A and TNR Gold Statement of Defence NR legal disclaimer - but it is exactly why we think that Robert McEwen is not going to "focus his interests on the companies he runs, U.S. Gold Corporation and Minera Andes." and just sit in the courts with other companies and he will be able to resolve the situation in out-of-the-court settlement and move forward using this unique opportunity.

We will throw another wild card here, maybe with all that chunk of cash Robert McEwen can pursue a radical move like buying out Hochschild Mining interest in San Jose mine or even all TNR Gold's Argentina portfolio with all its Gold and Copper properties - among them are strategic interest in Los Azules and Escorpio IV. Minera Andes can easily revisit its CAD2.0 price tag with cleared titles on its properties and record prices for Gold and Silver with Copper learning Mandarin day by day.

We have a position in these companies, please, do not consider anything as an investment advise, as usual, on this blog.

In any case Argentina is going to have a hot summer this season. We will continue to monitor the situation."

Enhanced by Zemanta
Post a Comment