Home Run Junior Producer - Atna Resources

ANTA RESOURCES (TSE:ATN; OTC:ATNAF)

 

KEY METRICS

  • MC $110 || 30M Debt || $20M Au Bullion || ~$10M Cash
  • $EV = $110M
  • 2Moz M&I Resource || 4.8Moz Total Resource
  • $EV/M&I Resource = $55/oz 
  • $EV/Total Resource = $27/oz

 

LOW FLOAT & TIGHT SHARE STRUCTURE

117M SO || 133M FD || 50% insider and institution owned

 

3RD PARTY VALIDATION

Barrick Gold Corp, the largest gold miner in the world, owns 13%, 15M shs

 

PRODUCING ASSET

 100% owned Briggs Mine, California

  • 40,000 oz/yr, cash cost $800/oz
  • @$1650 Au cash flow= $34M

 

EXPANDING PRODUCTION PROFILE


 

Q4-2012

100% owned Pinson Mine, Nevada

  • 75,000 oz/yr, cash cost $850/oz
  • @$1650 Au cash flow = $60M
  • Total Annual Production by Q4-2012 = 115,000 oz
  • Total Annual Cash Flow by Q4-2012 @ $1650 Au = $90M

 

Q4-2013

100% owned Reward Mine, Nevada

  • 30,000 oz/yr, cash cost $700
  • @$1650 Au cash flow = 28M
  • Total Annual Production by Q4-2012 = 145,000 oz
  • Total Annual Cash Flow by Q4-2012 @ $1650 Au = $118M

 

OTHER PROPERTIES & ROYALTIES


 

INCREDIBLE VALUE

  • Today's Price/2013 Earnings = 1
  • GDXJ Composite is currently 8x Earnings
  • If we extropolate forward, we can expect a Minimum 8-bagger in 24 Months!  

This is all with the following conservative assumptions:

  • Bottom range of production estimates 
  • High range of cost estimates
  • No income from royalty and other properties 
  • Spot prices at $1650 in 2014; and 
  • GDXJ valued at just 8x earnings

Some are calling for $2000+ gold by year end and GDXJ is trading at the bottom of its 2 yr trading range.  The upside is clearly there!

 

WHEN TO BUY

Short-term, I've identified the $0.90-$0.95 zone as a great entry point

Community Talk

Re: Home Run Junior Producer - Atna Resources

It just keeps going... wheres my pullback?!  

Re: Home Run Junior Producer - Atna Resources

I agree. OIL ETF is a great place to be  right now . I don't short companies but you can short oil etf's  when you think it's time to to let oil sleep a while.(after the pending run up) DEJ is an oil /gas play and gas is, as your aware,DOWN. That imo is when to buy into equities that are  undervalued by a long shot with the added baggage that NG carries right now. Most people don't see the  value in NGL's and DEJ has a lot of them. They are getting pooled in with a lot of predominant NG producers  that have  nothing but dry gas., I tried to download the NEW presentation but someone would have to explain how to do that.

Re: Home Run Junior Producer - Atna Resources

Thanks, Southpen.  I'll take a closer look though I'm still inclined to trade oil via ETF rather than through equity ownership in a producer.

Re: Home Run Junior Producer - Atna Resources

DEJOUR ENERGY, Up today on new reserve calculations.You might want to wait for a slight  pull back,inevitable due to the large amount of retail.(daytraders ).  This is the best value oil/gas  developer- producer out there.,certainly under a buc. Any questions,I know the company well.

Re: Home Run Junior Producer - Atna Resources

Southpen, Im in agreement with you that oil is a great trading opporunity in the short term.  I picked up some UCO to trade the coming mania but havent found a good developer/producer to put my money behind, for reasons we've already discussed to a lengthy extent.  I think $110-$115 is a matter of when.

I have a decidedly longer term view with regards to gold miners.  

I also think Potash and Uranium will be huge winners in the intermediate term.  I will do a write up about my top picks in these sectors - I particularly love IC Potash and UEX Corp.  

Re: Home Run Junior Producer - Atna Resources

I did the same thing with Tasman for different reasons. Bought well but I had no extra cash to buy more. I,m  @ 1 dollar more than I paid ,almost! I'm already out.  scotties gold pick turns out to be a real winner but I still think gold miners are suspect in the short term., silver will likely out perform gold, imo and OIL is where the mammoth gains should be ,then again OIL has a way of disappointing me.March looks good all around. 

Re: Home Run Junior Producer - Atna Resources

I have the same good news bad news scenario in that the good news is the price is up and the bad news is i DID NOT BUY ENOUGH.

Re: Home Run Junior Producer - Atna Resources

Ugh, I dont know whether to be happy or upset that ATN has done so well the past couple weeks.

I only took a small position and hoping the sp comes down a bit so I can back up the truck!

Re: Home Run Junior Producer - Atna Resources

Thanks Frank.  Atna's on a roll today.  Waiting for it to come back to the 90s before buying my next lot.

Look out for my next pick.  Under $150M market cap, with several district-size prospects (two targets over 100km strike).  Dream team management from Newmont, Dodge Phelps, Rio, BHP, Exxon, etc.  In multiple JVs with the heavyweights - Newmont, Freeport, Vale, Antofagasta, etc.  A smart money favorite - Sprott, Rule, Lundin have bought in... plus investment by the World Bank!

Re: Home Run Junior Producer - Atna Resources

I see in today's news that Barrick is selling its 20% stake in Highland Gold. Maybe using funds for something else, therefore all this did was give us an opportunity to pick up ATN shares at a Barrick created discount. ATN is up nicely so far this AM.

Re: Home Run Junior Producer - Atna Resources

Anyway, I just put the info out for opinions. I bought my first 1000 shares at $1.00 on Friday and plan to continue accumulating. So no worries in Frank's camp.

Re: Home Run Junior Producer - Atna Resources

I think short term it gives them the ability to liquidate without reporting. Like with any fund,they would still be listed as a holder of stock .  Positions could not be monitored on a daily basis I'd ask them.There might be a good explanation.

Re: Home Run Junior Producer - Atna Resources

Hey Frank.  Good observation.

I'm not sure what to make of Barrick's sales.  On one hand it could simply be a little bit of profit taking.  ATN bought out PMC's (a Barrick Subsiduary) interest in the Pinson Mine for $15M + shs, Barrick turned right around and invested the money in ATN.  Could the recent sales be profit taking?  $8M in Warrants outstanding with strike at $0.70 so it's possible Barrick is anticipating some selling pressure.

 However, I don't see Barrick as swing traders so it is most likely motivated by something else.  What's most curious is the amount of shs disposed, briging Barrick's balance to 11.6M shs, or just a shade under 10% of 117M shs out.  Barrick, now, is no longer considered an insider. I wonder what sort of benefit that presents to Barrick.

Re: Home Run Junior Producer - Atna Resources

Hey scottie, I see Barrick sold almost 3.5 million shares on Friday. Any thoughts?

Re: Home Run Junior Producer - Atna Resources

Brigus has almost 900,000 oz at the  Black Fox Complex in the Reserve category.A lot more development there,new zones. The Saskatchewan property looks pretty good as well .but.. they do have more shares considerably and  I was there when they did the split 1 for 4 ,I think.They seem to be riding up that dilution path too quick for my liking. I don't think theres any question that ATN is a better buy but I wouldn't go as far as saying there not comparable.The price says they are. I like ATN's plan ,starting at at Briggs ,developing the Reward next,(close by),and I see they are both heap leach.The best cost effective way to extract the gold from the ore ,IF they are allowed.I suspect they are. Capex of 29 million on the Reward sounds great.BRD's Saskatchewan mine will cost about 100m.  Southpen preliminary rating of a 70% buy.on a 3 month hold.The company is a buy ,but is GOLD mining?????

Re: Home Run Junior Producer - Atna Resources

Hey scottie. This is indeed undervalued. I picked up a 1000 shares today and intend to accumulate this as along with GPD

Re: Home Run Junior Producer - Atna Resources

They look like a good comparison to Brigus.

Heres a bare-bones comparison

Key Metrics

  • BRD = MC $210 || 50M Debt || ~$20M Cash
  • ATN = MC $110 || 30M Debt || $20M Au Bullion || ~$10M Cash

Resource

  • BRD = 2.2Moz M&I || 3.0Moz Total
  • ATN = 2.0Moz M&I || 4.8Moz Total 

$EV/M&I Resource

  • BRD = $110/oz
  • ATN = $55/oz

$EV/Total Resource

  • BRD = $80/oz
  • ATN = $23/oz

Annual Production by Q4-2013

  • BRD = 104,000 oz high
  • ATN = 145,000 oz low

Today's Price/Estimated 2013 Earnings

  • BRD = 2x
  • ATN = 1x

Not saying that BRD is necessarily a bad investment, I just don't think it's any comparison to ATN.  ATN would need to do a double just to catch up to BRD's valuation.  

Re: Home Run Junior Producer - Atna Resources

They look like a good comparison to Brigus.  Less shares  , but less production and more resources with a slight edge in local. another good prospect.

Re: Home Run Junior Producer - Atna Resources

Just an FYI - I am accumulating both GPD and ATN.  If you look at their production profiles, they are nearly identical.  I feel both are truly compelling opportunities with GPD a slight advantage in terms of reward and ATN enjoying a slight advantage in terms of risk.