Daily Insights – Wed 22 Feb, 2012
More good news from Rye Patch Gold
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More good news from Rye Patch Gold
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CFS says:
I bought some shares of Rye Patch when first discussed by Big Al. I still own those shares, but I am disgusted by the amount of dilution.
As of 11:59pm ET February 21st, 2012
Filing
Date Transaction
Date Insider Name Ownership
Type Securities Nature of transaction # or value acquired or disposed of Unit
Price
Feb 8/12 Feb 8/12 Challis, Jonathan Direct Ownership Common Shares 51 – Exercise of options 200,000 $0.400
Feb 8/12 Feb 8/12 Challis, Jonathan Direct Ownership Options 51 – Exercise of options -200,000 $0.400
Jan 20/12 Jan 18/12 Poznanski, Bernard Direct Ownership Options 50 – Grant of options 100,000
Jan 19/12 Jan 18/12 Mohan, Alnesh Direct Ownership Options 50 – Grant of options 50,000
Jan 19/12 Jan 18/12 Kajszo, Joe Direct Ownership Options 50 – Grant of options 600,000 $0.600
Jan 18/12 Jan 18/12 Challis, Jonathan Direct Ownership Options 50 – Grant of options 200,000
Jan 18/12 Jan 18/12 Russell, Charles J.G. Direct Ownership Options 50 – Grant of options 200,000
Jan 18/12 Jan 18/12 Howald, William Carl Direct Ownership Options 50 – Grant of options 600,000
Jan 13/12 Jan 12/12 Howald, William Carl Direct Ownership Common Shares 10 – Acquisition in the public market 8,000 $0.610
Jan 13/12 Jan 12/12 Howald, William Carl Direct Ownership Common Shares 10 – Acquisition in the public market 4,000 $0.600
CFS says:
It does, however, have PERFECT TA
CFS says:
RPM.VN – Rye Patch Gold Corp (TSXv)
Date Open High Low Last Change Volume % Change
02/22/12 0.7200 0.7500 0.7100 0.7400 +0.0500 162044 +7.25%
Composite Indicator
Trend Spotter TM Buy
Short Term Indicators
7 Day Average Directional Indicator Buy
10 – 8 Day Moving Average Hilo Channel Buy
20 Day Moving Average vs Price Buy
20 – 50 Day MACD Oscillator Buy
20 Day Bollinger Bands Buy
Short Term Indicators Average: 100% – Buy
20-Day Average Volume – 249574
Medium Term Indicators
40 Day Commodity Channel Index Buy
50 Day Moving Average vs Price Buy
20 – 100 Day MACD Oscillator Buy
50 Day Parabolic Time/Price Buy
Medium Term Indicators Average: 100% – Buy
50-Day Average Volume – 442483
Long Term Indicators
60 Day Commodity Channel Index Buy
100 Day Moving Average vs Price Buy
50 – 100 Day MACD Oscillator Buy
Long Term Indicators Average: 100% – Buy
100-Day Average Volume – 501962
Overall Average: 100% – Buy
Price Support Pivot Point Resistance
0.7400 0.6933 0.7333 0.7733
Big Al says:
Thanks cfs,
So indicators are a solid “buy”, but the option grants are something you don’t like.
Not sure why Challis, who I do not know, would exercise 400,000 at $0.40 unless he really needed the money. That is, on the surface, a profit of about $130K, but he does loose 30% of that because it would be short term capital gains. Is that double counting by the way. Should it be exercise of 200K? I also find it interesting that he was, ten days later, granted another 400K options.
Interesting situation here, and I will talk with Bill about this.
Thanks for the info,
Big Al
CFS says:
Big Al;
One of the reasons they have 138 million shares, is mostly financing their exploration, but also generosity with warrants on financing and options.
CFS says:
I just copied what was on SEDI, but it could be a double typing on SEDI.
If I had to guess it would only be exercise of 200,000 shares, since that was what he got on Jan 18.
CFS says:
I went back and checked on SEDI.
I did report it correctly, but the way things re-align is a bit confusing.
The first line for Challis reports getting shares from exercise of options.
The second line for Challis reports the loss of options due to exercise.
CFS says:
Research commentary on the encouraging developments at Nevada gold junior Rye Patch Gold Corp
ORONTO, Canada – Ubika Research has released a research commentary on the implication for Rye Patch Gold Corp (TSX VENTURE: RPM) from the recent announcement by Barrick Gold Corp (TSX: ABX) (NYSE:ABX) that it has connected the Red Hill and Goldrush deposits and doubled the gold resource at the Cortez trend in Nevada. To view the research commentary please visit: http://www.smallcappower.com/articles/rye_patch_update_022212.html
Nevada gold junior Rye Patch Gold’s 100% owned Garden Gate Pass (GGP) project covers 1,300 hectares and is located just two kilometres south of Goldrush discovery of Barrick and near Barrick’s Cortez Hills mine.
Rye Patch Gold Corp has also entered into a joint venture agreement with Barrick Gold Corp (TSX: ABX) (NYSE: ABX), McEwen Mining Inc (NYSE: MUX) and Magellan Minerals (TSXV: MNM) to earn a 60% interest in Patty Project (53.1 sq km) located immediately south of Rye Patch’s 100% owned Garden Gate Pass project; 10 kilometres south-southeast of Barrick Gold’s recently announced Red Hill and Goldrush discoveries; and east and adjacent to McEwen Mining’s Tonkin Springs project along the western margin of the Northern Nevada Rift (NNR).
Rye Patch Gold Corp (TSX VENTURE: RPM) (CVE: RPM) (OTCQX: RPMGF) is an advanced stage exploration company which has NI 43-101 compliant estimate of 3.9 million ounces of gold and gold equivalent resources.
To view research reports, analyst commentary and CEO video interview for Rye Patch Gold Corp (TSX VENTURE: RPM)(CVE: RPM)(OTCQX: RPMGF) please visit: http://www.smallcappower.com/companies/rye-patch-gold-corp/home.html
About Ubika Research
Ubika Research is an investment research and capital market service firm based in Toronto and Vancouver. It provides comprehensive research, communication and capital market exposure program to highlight the investment potential in micro and small cap companies. For more information visit http://www.ubikaresearch.com
Disclosure
Ubika Research has received compensation from Rye Patch Gold Corp for providing analyst research coverage
Big Al says:
Many thanks cfs,
I know nothing about Ubika Research. I will also look into the compensation paid them by Rye Patch.
Not necessarily a bad thing.
Big Al
Dai Uy says:
Al or anyone:
Probably a couple of dumb question but here they are nonetheless………………
At what point in time must a company report the granting and/ or exercise of stock options?
At what point of time provided that there is an exercise of stock options, must a company report the fully diluted number of shares?
I understand that there is often a lag time as far as required reporting,,,,,,,,,,,,,,,,
Thanks
CFS says:
In theory granting of options and exercise thereof should be reported by the individuals involved within two weeks, I believe. I have never seen a penalty for non-reporting, however, and I have seen delayed reporting. Big Al can probably give the exact reporting requirements, since that is part of his business.
Big Al says:
I believe that in Canada, whenever a Company grants stock options they must put out a press release to that effect.
Regarding the exercise of options, I believe that only officer, directors and insiders by virtue of the amount of their share holdings have to report on Sedi.
I will verify that, but I do believe that is the case.
Big Al
Marc says:
CFS,
Is Scorpio Mining “dead money” right now? What does your analysis say? I am going to redeploy the funds else where, I think.
All the best,
Marc
Might add to my position in to NZ energy thanks to Big Al.
CFS says:
while I dislike the number of shares out in Rye Patch, I personally kept my shares. I rarely ever go against Technical analysis, and that says 100% buy. It is not often one gets that positive a buy!
Marc says:
CFS,
Just checked my notes! You thought Scorpio share structure was REALLY questionable – maybe that all I need to divest? Sorry about that.
Marc
Matthew says:
At a glance, Scorpio looks like a worthy spec to me. It’s up 100% since March and is only off it’s Sept. high by about 15%. The chart looks good. I think it’s going much higher. Considering the huge volume on Dec. 16, some big money obviously agrees. If you look at the HUI on the same day, you’ll see that the 16th was a time of immense fear. So, while most investors were capitulating and throwing away their shares, big money stepped in and picked up a lot of shares in a lot of issues. Scorpio was one of them. Volume that day was 10.2M – 13x the 3 mo. daily average! Yet, the price was only driven up about 12% since so many wanted out. Others that enjoyed similar action that day were AXU, AG, SBB.to, and FVI.to. Nothing is a sure thing, but such capital flows are a very, very good sign.
Shad says:
I agree with you Matthew on Scorpio. There have been a few good volume moves on Scorpio starting back in in mid 2011 and then again in December. Also it’s chart has a definite longer trend to the upside starting back in 2010, but it did not sell off nearly as bad as other equities in the silver space last year. The longer term chart trend is up and the trend is normally your friend. Also the increasing of capacity of the mine by 80% will equate to more silver and higher profits in 2012 once this years numbers start coming in. (the higher silver prices are also going to help).
Big Al says:
HI Marc,
I did a little bit of quick research on Scorpio.
Net earnings for the nine months ended Sept 2011 were down a bit from the like prior period.
The Company did announce in January that it was increasing production capacity by 80%.
No press releases since 1/30/12.
Also in January, the Company reported increased production as compared to the prior year.
Seems like a solid company, but not my cup of tea. I don’t see a lot of upside unless the Nevada property is really good.
Just my off the cuff opinion.
Big Al
Marc says:
BTW, Does anyone out there have the intimate story on Nevsun Resources? My “watchlist” indicates that they are REALLY on the move.
Marc
CFS says:
Re: Nevsun:
Equedia came out with a newsletter back on Feb 10 recommending 6 stocks of which NSU:CA was one.
Also Nevsun’s website came out with a positive statement regarding UN discussions on Eritrea. This was picked up by several other sites giving positive comments.
Re: Scorpio: SPM:CA
The Scorpio website announced increasing plant capacity by 80% about a month ago.
http://equedia.com/equediaweekly
made a favorable comment about 2 weeks ago.
Recommendation from me: Check out the company’s website of those you own or are interested in every few weeks for news.
Marc says:
Thanks CFS, that is something I need to do more of and I appreciate the info!
Marc
Big Al says:
Everyone needs to remember that in the universe of junior mining stocks, and Scorpio is in that category, the upside usually is realized on the road to production and not much when production is achieved.
A great example is Claude Resources.
Big Al
Matthew says:
True, more risk equals more potential reward. There are exceptions though. GORO, for instance, tripled in just 6 months after production was achieved (while paying a dividend at the same time). I’m not sure what you mean regarding Claude; it was already a longtime producer when it tripled in the fall of 2010.
I’m betting we’ll see Claude reach it’s point and figure price objective of $7+ within 18 months. It’s currently $1.34. Their resources continue to grow while increased production is the plan for this year and the years after. I think they will deliver.
Big Al says:
HI Matthew,
Claude Resources was trading at $2.80 in 2/11 and is now trading at $1.34.
Don’t get me wrong, I know the guys from Claude and it is a nice little company. I have seen the stock go from $0.60 to about $1.50 and back to under a buck. Now, it has gone from $2.80 to $1.34. Maybe it is a good buy. I just like the odds better in some solid exploration plays. If I want to buy a producer, I will buy Barrick Gold.
Best,
Big Al
Matthew says:
Come on Al, Barrick’s market cap is 220 times that of Claude’s ($50B vs. $225M). Positive drill results can still move Claude’s price substantially. This is not true of Barrick. Claude is also likely to double production before Barrick increases it even 5%. As far as the 2011 price action is concerned, most juniors were similar, while most explorers did far worse. Small producers fill a niche between too risky and too safe; and still offer big upside. Another example is First Majestic. It went 7 fold in 7 months in 2010-11. Having said all that, I have to admit that I hold a lot more of the non-producers that you favor.
We’ll see what happens!
Dai Uy says:
Al et al:
Just for the heck of it and as a shareholder and because Rye Patch is currently in litigation and because Rye patch on their website solicits input and questions from their shareholders, I sent them an e-mail this morning about their current litigation with Couer requesting an answer to some legal questions(3) that I had as I know from experience that anyone or anyhing in litigation can be a crap shoot as far as an outcome…………..
I didn’t, quite frankly, expect a reponse becuase of the litigation but shortly therafter, a very nice lady, Karen, from Rye Patch, responded with all the pleadings and relevent documents that their attorneys allowed to be made public to me or anyone else in a file.
To the extent that these documents and my analysis may be of interest to you all,
I’d be glad to share in a couple of short paragrahs an analysis as to the nature of the litigation and the claims by both parties.
John W. Robertson says:
If you’re waiting for an expression of interest, Dai, count me in! Thanks for the legwork. (and thanks to Karen at Rye Patch).
Big Al says:
Hi Dai,
I definitely would like to see it on this site.
Thanks,
Big Al
Dai Uy says:
Al and John;
I had assumed that Coeur had filed the action against Rye Patch for some type of Declaratory Judgement action in Federal District Court but in fact Rye Patch is the Plaintiff in this quiet title action filed in the state court of Washoe County, Nevada.
The Complaint provided to me states four claims for relief by Rye Patch:
1) Quiet Title
2) Trespass (by Coeur)
3) Slander of Title(by Coeur)and a request by Rye Patch for punitive damages
4) Injunctive Relief against Coeur and attorneys fees and costs
There are approximetely 412 unpatented claims previously owned by Coeur in dispute. These claims cover about 22 sections or 14080 acres.
Defendant Coeur’s answer to the complaint was not provided so it not possible to ascertain what their possition is. Also, no paperwork or order on the preliminary injunction was provided so I assume based on other information that I have pieced together that Rye Patch was successful except for about 12 of the claims covering 1800 acres where Coeur has their operations i.e. mill, leach ponds,ore stockpiles etc. In order for a preliminary injunction to be issued, a party must show irreperable harm and a high probability of success on the merits at trial.
Please understand that I’m piecing together a lot of this because of insufficient information and paperwork. Apparently when Rye Patch discovered sometime in 2011 that Coeur had not paid the necessary claim fees to the BLM, Rye Patch paid them and immediately started to agressively perfect the claims by staking and preparing resource estimates, digging holes, picking up samples or whatever is necessary to perfect the claims. According to one of the 3 letters CEO Howald wrote to Coeur’s CEO Krebs, Howald accused Coeur of claim jumping and further setting monuments on the staked claims in an attempt to overide Rye Patch’s efforts. Accordingto Howald’s letters (all 3 of which are attached to the Complaint) there were some minor skirmishes between employees of both companies and Howald asserted that Coeur was acting in bad faith.
No trial date has been set. While I believe the above is reasonably accurate, please understand that it is simply my view of things and it may contain and incorrect assumptions because of insufficient information on my part.
John W. Robertson says:
Thanks again, Dai. I will certainly watch for the outcome of the trial(s) in the future.
roger wiegand says:
Rye Patch is on our list of recommended companies to buy and hold. We are beginning to see some new ones emerge in this current commodities markets upswing. Crude oil and gold remain our favorite longs to 4-31-11. I expect some new ideas for larger oil company call options, newer junior stocks, and updates on our gold trades and suggested investments in Trader Tracks Newsletter. 718-457-1426 to subscribe in NYC. Interested traders can call Linda Gorman at 800–494-4149 for details on my new one day trading instruction class in Tempe AZ on 4-26-12. I am revealing all of my best trading secrets in the course. Debated on this for months but we are going all out. – Traderrog
Tony says:
if you listen to the jay taylor interview bill mentions that the court date is scheduled for the fall of 2012 after the do prelim meeting in the summer. I don’t have the link but you can get it from a poster on stockhouse rpm board
Dan,calgary says:
An investor in the junior market also must consider which small stocks will become dividend paying stocks in a few years for retirement or supplememtal income. That is why I hang on to at least a few Scorpio shares still. By the way, expect retirement ages to increase on a sliding scale over time.