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Friday, October 4, 2013

Rio Alto and Bevan2Gold


CEO.ca - the top three from Denver. Guy reviews three mining companies, and provides links to their Denver Gold presentations.

Here's a link to the Rio Alto presentation. Listen to Alex Black's shaky voice, and watch him perspire and fidget as he explains why the company's share price has collapsed down to $1.80.

And here's a link to the B2Gold presentation. Watch The Clive explain why he's so much better than Alex Black.


5 comments:

  1. Right off the top Clive states that B2 is a rapidly growing gold producer.. what pony do you want to put your money on? I get the feeling Clive is trying to get to the Goldcorp level where as Alex is god running with what he has got.

    Anywho I think it is about time to run the "how low will Rio go" contest again as year end tax loss is neigh.

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  2. I've been considering an investment in RIO for the past few weeks based on IKN analysis and my own diligence on the company. However that video of Alex Black is a dealbreaker. Now I understand why the company's stock has fallen so hard. It is clear that Alex Black is a poor capital allocator and the company is trying to do too many things at once. He is prematurely discussing buying equipment for a mine for which the feasibility study has not been completed. His words' Cash flow should cover long lead items'. What if it doesn't? Upcoming dilution at bargain basement prices?
    What is the amount of money invested into the mine re-optimization plan and what is the return on those funds? Why is this info not in the presentation to investors? It should be top of mind for all high level RIO exec's. I get the impression that Alex is trying to build the biggest mine possible regardless of the return of capital invested.
    Has the ROI on exploration been evaluated vs acquiring top notch properties that are trading at discounts?
    Around the 12 minute mark Alex starts to talk about phase 2 of La Arena. He describes it as ' not the biggest copper mine but doable'. What does that mean?? I realise it may be early to discuss NPV's without the FS but those words give me zero confidence that the $200million in capital costs couldn't earn a better return elsewhere. End of RIO story for me. I could see private equity swooping in and firing this guy, slashing costs and harvesting cash flow until all the investors in the PE company have private jets.

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    Replies
    1. Alex Black managed to build La Arena successfully with minimum dilution. Proven home run hitter, not your average Vancouver mining dumbass. Really I consider him at the same level as Eric Feir at Silvercrest. Unless he's recently acquired a brain parasite I'd have to think he'll figure out a successful way to get to stage 2.

      Top notch prospects still need capex. And long lead items are long lead items - if you don't have them your stage 2 never happens. I've been there. And there's the central problem - where does the capital come from?

      His problem is $1300 gold came during depletion of the oxide. Maybe he's assuming he can find another year or two of cheap production from new discovered oxide deposits? And the problem is capital is waiting til every company is twisting in the wind. In fact capital is purposefully sabotaging companies to get a discount before swooping in - look at AQM and IRL.

      So my central question is, has Alex Black got the resources to build stage 2 with no help from anyone at $1300 gold? No loans, no streaming? If not, the only thing that will save RIO is $1500 gold. I think we can still get $1500 gold by 2014, otherwise I'd ignore the junior mining world entirely. But til then the jackals will circle.

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    2. I made it into about 5 minutes of Alex's presentation and about 1 minute into Clive's which is about the given attention span of any coke induced money manager, my money was on Clive right away.

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  3. I had the pleasure to meet Alex in Lima a few years ago and the guy is a pro, I made some decent money with RIO buying it under a dollar (no current position)...Alex is a visionary, when he was applying for construction permit for La Arena....La Arena was almost built already...how come?...because he knows local shit, he lives in Peru and knows how to do business down there...if he's talking about buying equipment "prematurely" I know for sure he has a plan already, but he wont tell you

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