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Thursday, November 1, 2012

The OTHER Sandstorm

And hey, check out Sandstorm Metals and Energy:

They've turned their worthless bankrupt streams into profitable ones, Nolan Watson is doing even more appearances on TV and in the media, and you all should think I'm a fucking nutjob for having bought 500K of their December 21 US$0.70 warrants because why should they finish in the money anyway?

But to me this is a very sexy turnaround story. Can Watson really turn around SND? After all, SSL did something like a double in six months; would you pay a premium to own a Donner Metals copper stream, a few gas wells, a coal bed somewhere, and a big brother present of a PGM stream?

The thing is, if those warrants can finish in the money, it's equivalent to a $100M financing. Watson's demonstrated that he can get a $200-$300M NPV out of a $100M investment, so strangely, the minute they can get the share price to 70 cents, it's worth $1. It's a bistable system. Freeeeeaky.

My warrants were a gamble, and I understand I can lose every last cent. But it gives me a good reason to follow this really weird and interesting story.


  1. how does raising $100M at 70 cents make the stock worth $1?

    1. I have a fundamental assumption there that the minute they get $100M in the bank, it's worth $200-$300M NPV cos that's the NPV of the stream they can buy with it, given past history and assuming they don't buy another sack of total shit like their many worthless energy streams.

      Take that 150M shares, add to the float, assume a 70 cent price, there's your share value; but then take that $250M (say) and divide across the shares and all of a sudden they're worth $1.

      I admit it's unconventional, but my assumption here is that streamers ARE MOST DEFINITELY NOT miners. Otherwise why does a big SSL financing make the price shoot UP?!?!

    2. Oh also - I only say their energy streams are worthless sacks of shit in a facetious way. Gas and coal have probably bottomed. Then again, their partners did all pretty much go bankrupt and the streams were all pretty much non-performing. But they're getting fixed now which is good.

  2. If you managed to buy your 500K warrants at $.005 then you could have played it very conservatively and sold 250K or 300K at $.015 today (very liquid day at that price) after tripling your money and taking your initial risk capital off the table and riding a free 200K-250K warrants for the longshot homerun.

    Of course trying to save $3000 could mean missing out on potential $90,000 in lost profits too if you sold 300K warrants. But I think you would still be happy to potentially earn $60,000 risk free.

    1. Sure. Problem is, when others are willing to pay 1.5 cents for 0.5 cent warrants, it's awfully difficult to force yourself to sell.