Thom Calandra: Four Actions to Take Right Now

SAN FRANCISCO – This is one of those “Things You Must Do Before The New Year.”

Here at Torrey Hills Capital’s Baby Bulls, I am altering that hackneyed come-on to this: Four Actions For Right Now. (Whose New Year are we talking about, anyway?)

1.    Buy low. Tax-loss selling season has driven more than several metals equities to prices not seen since 2009. These include Platinum Group Metals (PLG and T.PTM), Great Basin Gold (GBG and T.GBG), Great Panther Silver (GPL and T.GPR) and Canaco Resources (V.CAN). I own all four, and there are others in my portfolio that are depressed and deserve a look-see, including Golden Valley Mines (V.GZZ), Solvista (V.SVV) and Gold Standard Ventures (V.GV). (See portfolio holdings link below.) PLG, GZZ, GV and GPL are investor-outreach clients of Torrey Hills Capital – meaning the firm, including me, can benefit if stock options we have received in payment for services rise in value. (All photos Thom Calandra)

2.    Pick out a favorite show or two and attend it. That’s me in the photo at the Munich Metals Show with Endeavour Silver’s Lana McCray. Munich runs in early November and is probably Europe’s biggest for ordinary folks, some 7,000-plus time time around. One of the North America biggies for individual investors is Joe Martin’s Cambridge House show. It’s the third week of January in Vancouver. I will be leading two tours of the exhibit floor, along with two other speakers, Chris Berry and Keith Schaefer. See www.cambridgehouse.com for more info.

3.   Call a geologist, VP of exploration or a metals CEO on the telephone. That is, instead of asking your friends, your neighbours or the mailman wottup (or down) with your cherished exploration and mining holdings. You might get someone to pick up the telephone.

4.    Look at special situations. I have been tracking the extreme selling in shares of Great Basin Gold. A sell-side analyst after a mine visit to the Burnstone property in South Africa threw cold water on GBG’s efforts to employ long-hole-stoping methods to improve efficiencies and mechanize mining development. LHS is a way of excavating that is similar to diging an underground quarry. But it requires precision. To be sure, GBG, led by CEO Ferdinand Dippenaar in Johannesburg, could have defused the early long-hole-stoping controversy by spelling out just why at least two trial-and-error attemps were mostly in the error column. (I believe but have not confirmed that at least one executive lost his job over this. The LHS layout is now in its third blueprint, or iteration, one analyst says. ) Now that the company’s equity value of $500 million is a third of what it was earlier in the year, Ferdi Dippenaar is on the road, explaining why LHS is “the future” of mining in Suth Africa. On Dec. 12, GBG will bring analysts to Burnstone in an attempt to clear the air. “We started out on a trial basis, and we said that previously,” Mr. Dippenaar says.  “We have improved the mining method; I am thrilled we did evolve the design where we now do less development, for more tons and ounces and less dilution.” He adds the current market cap reflects only GBG’s second mine, Hollister in Nevada. I have been to both several times and in my most recent South Africa visit, came away, I am sorry to say, awed by LHS and its possibilities. I was wrong then and hope to be right now. By the way, Nevada’s Hollister actually employs some select LHS methods. “It’s criminal. Burnstone will be a success, believe me. The London-based sellside) analyst spoke crap,” FD says. At least two other banks followed the original analyst’s report with downgrades, lowered ratings or reduced guidance of their own. I have reported extensively on Burnstone and Hollister and see this as a special situation. If GBG gets more ears next week in London and after that on the site tour, the shares will gain 20 percent in short order; they’re now at 93 cents USA, a level that has me adding to my money-losing GBG position. If I were not in China next week, I would be on this revisit. Pray tell, Mr. Dippenaar, prove me right.

COLOMBIA: Paul Harris in Medellin writes up the latest on several companies, and, importantly, the layout of the government’s plan to create strategic blocks of  energy and metals properties. If the government carries through, individual speculators will find it difficult to lock up exploration parcels. Companies that are banking on their applications for mineral licenses for pending concessions might be up the Cauca River without a paddle. We’ll see. Here is Paul’s report: Colombian Mining December 2011.

NOTES: I am a partner of investor outreach firm Torrey Hills Capital in Del Mar, near San Diego, California. Many of the companies in this article are clients.  … For blow-by-blow on market thoughts, meanderings and purchase/sale actions, check out my StockTwits: stocktwits.com/thomcalandra. … We also have our own BabyBulls Twits at https://babybulltwits.wordpress.com.

TRAVELS: I will be in Hong Kong and Shenzhen the week of Dec. 5. I am attending a Shenzhen investment conference at the Sheraton in that Chinese city. … I will be at Cambridge House’s January conference in Vancouver.

HOLDINGS: You can see my portfolio online. It is under the Stockhouse.com portfolio function and my user name, which is TCALANDRA. I am neither a financial adviser nor a certified planner. Nearly all of my holdings are metals equities. I also own gold and silver bars and coins and a Marin mountain bike.

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