If you were looking for an investment in the mining sector, you could do a lot worse than Global Metals & Mining (GBE.ASX). Aside from the fact that the company has $19mil in cash, and a total market capitalisation of $15.5 million (at its current share price of 7c), we should highlight that:
1. This values the company at 'negative' $3.5mil, when in this type of market, I would expect a company to be trading at positive $3.5 million before any consideration of its assets.
So what are the assets?
2. Well it is
But there is more...
3. The company is half way through a share-buyback plan, and historical evidence suggests that its entry price is 6.5-7.5c, averaging 7.1c. Not a bad entry you might say, that makes maximum use of its equity, as well as 'underwrites' any investment you make in the company. The buyback expires in May 2013 (3-4 months), so that's nice insurance given their historic propensity. You might argue that such buy-back prevents you from getting a lower price. That is true enough; but it does protect the price you do get, and for many investors, that is better.
4. The Dow Jones is testing its 5-year (2008) highs of 14,000 points. I expect the market to tentatively break that, then to rally. The US property market has turned, Japan is engaging in stimulus, Asia can be expected to get stronger, and well, the US has no qualms really about monetary stimulus either, since they are only repaying in debased USDs. The fundamentals of 1 billion people engaging in this larger globalised market are compelling. Commodity prices have also recovered, so we expect more of the same. This is a mere correction in a 'super-cycle' that will go on for another 20 years. A 'correct is good' as my father would say. Well, not after a decade-long boom, but you have already paid that price. The recent 4 year recession is typical, and not unprecedented, but it need not be sustained given the positives.
So I have yet to speak of the projects. The flagship project for GBE is a niobium-tantalum resource. Both useful commodities, but the niobium resource is particularly important because the principal source is a single mine in Argentina. Understandably, the Chinese are keen to develop this project as a 'secure source of supply', and you can expect to benefit from them bankrolling the project. With $19mil in the bank, there is no concern about a cash drain, and Chinese equity participation should avoid dilution.
These also have a rare earths project which is less advanced.
Asian property markets outperforming Japan Foreclosed Guide Philippines Property Guide
Profit from mining with Global Mining Investing eBook
1. This values the company at 'negative' $3.5mil, when in this type of market, I would expect a company to be trading at positive $3.5 million before any consideration of its assets.
So what are the assets?
2. Well it is
But there is more...
3. The company is half way through a share-buyback plan, and historical evidence suggests that its entry price is 6.5-7.5c, averaging 7.1c. Not a bad entry you might say, that makes maximum use of its equity, as well as 'underwrites' any investment you make in the company. The buyback expires in May 2013 (3-4 months), so that's nice insurance given their historic propensity. You might argue that such buy-back prevents you from getting a lower price. That is true enough; but it does protect the price you do get, and for many investors, that is better.
4. The Dow Jones is testing its 5-year (2008) highs of 14,000 points. I expect the market to tentatively break that, then to rally. The US property market has turned, Japan is engaging in stimulus, Asia can be expected to get stronger, and well, the US has no qualms really about monetary stimulus either, since they are only repaying in debased USDs. The fundamentals of 1 billion people engaging in this larger globalised market are compelling. Commodity prices have also recovered, so we expect more of the same. This is a mere correction in a 'super-cycle' that will go on for another 20 years. A 'correct is good' as my father would say. Well, not after a decade-long boom, but you have already paid that price. The recent 4 year recession is typical, and not unprecedented, but it need not be sustained given the positives.
So I have yet to speak of the projects. The flagship project for GBE is a niobium-tantalum resource. Both useful commodities, but the niobium resource is particularly important because the principal source is a single mine in Argentina. Understandably, the Chinese are keen to develop this project as a 'secure source of supply', and you can expect to benefit from them bankrolling the project. With $19mil in the bank, there is no concern about a cash drain, and Chinese equity participation should avoid dilution.
These also have a rare earths project which is less advanced.
Asian property markets outperforming Japan Foreclosed Guide Philippines Property Guide
Profit from mining with Global Mining Investing eBook
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