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January 22, 2009



Hi Monty, Just following up on your MFL comment:

"Minefinders has recently raised money that it expects to use to purchase another project to take into production. As such, one might want to be looking for a Mexican heap-leach project with a couple of million oz in the ground to invest in as a Minefinders takeover target."

I think the money won't be used for an acquisition. While they do have long term plans to acquire an advanced project that would be late 2009 or 2010 (as per presentation slide 22/23 http://www.minefinders.com/_resources/MinefindersJan2009b.pdf)

The following is from Tuesday December 2, 2008, press release:

"The net proceeds of the Issue will be used to enhance working capital, reduce indebtedness and for general corporate purposes." I'm not sure of the total debt but I read the number of $58 million a few places.


Thankyou for leaving a comment. I just spent an hour of due diligence on OCG.TO. I find:
(a) Leaving out its debt it is by far the cheapest gold producer on price / annual oz, price / oz in the ground and probably on price to operating cash flow.
(b) They have 400M$+ in debt! Yikes. If you include that in the market cap then they are roughly equivalently priced to the miners in this post.
(c) They have half their production hedged on unfavorable terms for 2009 and 2010. Always discourages the gold enthusiasts.
(d) The mine they had to stop half-way thru production looks pretty nice.

Seems very risky, but likely to work out as these guys do some kind of deal to get the Phillipines project going and perhaps reduce some debt... Provided price of gold holds up.

I may open a little position tomorrow if I can get it around $.30.


Varghese Cherian

I am writing this as I would like to get your opinion about a gold producer OCEANAGOLD (OGC) currently trading in three exchanges - New Zealand, Australia and Toronto, Couple of years back, they did an offering at the TSE. I was quite impressed with their potential, I did some significant investing in that stock. Unfortunately, they got beaten up because of some of the financial difficulties they started facing in Philippines where they were developing a gold-copper mine which had the potential to put them in the high end of the mid-tier category. Because of the lack of finance, they temporarily suspended that development. As a result, the stock got hammered down to $0.15, although OGC is still the largest gold producer in New Zealand with production target FY09, from the three New Zealand mines in the range of 280,000 - 300,000 ounces at a cash cost of US$425 to US$475 per ounce. Current year guidance is 270,000 ounces. I do not understand why this stock got beaten up this badly, althogh they have some financial difficulties, their production is that of midtier producer. Recently, the CEO purchased almost 430,000 shares at 30 cents . This plus a report by Merrill Lynch, Australia saying it is the chepest gold stock in the market had some positove effect pushing up the price to 0.45 cents. I would appreciate if you have any comments about the potential of this stock - is it time to take the losses and get out or continue to hold.

Thanks and Regards

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