Wednesday, March 12, 2014

Note to all Sandstorm buyers

Well, this is an impressive-looking chart and all....

but it's a $560M company with operating cash flow (per 4Q) of $8M per quarter.

Um, except that they had to take a $52M impairment in 4Q because Nolan Watson's DD inspired him to piss the shareholders' money into the watery depths of Serra Pelada, from where it shall never return. That's... um... six times 4Q's revenues, gone in one impairment.

So, basically, if you think you're buying a $560M company at 17x cash flow, you must be assuming Nolan's never going to book an impairment again.

Like he had to do in 3Q on Bracemac.

One screwup is just a screwup. Two is a trend.

Sucks cos I'd love to buy this, but til Nolan pulls his head out his own Libertarian Objectivist ass, I have to stay away.

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