Al's Insights – Fri 18 May, 2012

Cory Breaks Down The American Manganese PFS Conference Call

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Featuring:
Cory Fleck

Comments:
  1. On May 18, 2012 at 1:06 pm,
    Mark Alan says:

    And let’s not forget how difficult the future environment is going to be in the financing sector. With all the outstanding derivatives everywhere, the larger banks are going to fail resulting in a fear of putting one’s capital and savings into any type of investment. Juniors who do not have the means to finance or producing some form of cash flow, will go the way of the dinosaur. AMY might be a great company, I am not a shareholder. But one really needs to consider the long term uses of manganese and if there are other alternatives being discovered from advancements in technology.

    • On May 18, 2012 at 2:03 pm,
      Michael says:

      Long term uses… ??? Demand will be growing. No manganese = no steel!
      “There is no substitute for manganese in steel (total manganese market greater than 33 billion pounds per year, fourth largest traded metal)” … and think about batteries… Lithium-manganese batteries will push demand even higher in the future. Manganese is a base metal for basic needs. No “advancement” or alternative substitutes there… sorry!

      • On May 18, 2012 at 2:13 pm,
        Michael says:

        ok… I guess there can be some advancement for example if we could substitute steel with something else… carbon nanotubes or graphene composite

      • On May 18, 2012 at 2:39 pm,
        Cory says:

        Hi Michael,
        You are completely right; without Manganese there would be no steel!!
        Another interesting factor of the technology AMY patented is that it is far greener. No waste = less clean up costs and potentially some tax breaks down the road.
        Cory

        • On May 18, 2012 at 6:02 pm,
          John W. Robertson says:

          The Mg mine AMY will open, about 1.5 hrs drive to my west, will use around 90% less water than what traditional chemistry would have needed to extract Mg. That’s actually a key reason why no one has ever mined in the Artillery Peak area. The Bureau of Land Management have known about the manganese in the ground there for decades. I’m not sure if the patent was received yet for the chemistry process, but it sounded good to me when I last looked into it (Dec 2011). Long term, it seems like an unbeatable project. When I get some time, I’ll re-analyze it again. My condolences to anyone holding a short-term loss (I tried to buy but was chasing market…guess I’m glad to say I don’t own it yet…). But this stock is going to go crazy when the mine opens and makes revenue…unfortunately, that will probably be in 2015 (not 2014), and who knows where the world will be at that juncture. Still, the stock will make a lot of money from these levels.

          • On May 19, 2012 at 4:04 am,
            Jerry O^OTB says:

            great info jwr

          • On May 19, 2012 at 5:00 am,
            Big Al says:

            Morning John W,

            Know what, my friend, I agree with you 100%.

            Big Al

          • On May 19, 2012 at 12:28 pm,
            John W. Robertson says:

            Why thank you Jerry OTB! I studied AMY very carefully. I didn’t feel the urge to get in to early, and it turns out I lucked-out by not buying yet. Make no mistake though, this company is going to make some serious $$ if they get that mine open. I am curious to see how Larry Reugh actually funds it. The day that financing is in place, the stock takes it’s first major stage up. Note that getting in at these levels, while volatile — and possibly risky due to the unknowns in the economy for the next 5 years — offer the potential for staggering returns.

            By the way Al, great interview with the G-Man. Trust you that, after your kitchen flooded, for you to seek out the original Plumber (sorry, I just have been biting my lip for 3 days now). I have a great deal of respect for those who have fallen and redeemed. They often teach the best lessons.

      • On May 18, 2012 at 3:47 pm,
        Big Al says:

        Hi Michael,

        That is exactly why I am not selling my stock!

        Big Al

    • On May 18, 2012 at 2:52 pm,
      Mark Alan says:

      Michael, Cory

      Never said that manganese isn’t necessary. That was the whole point of my last sentence. One needs to consider the long term fundamentals for manganese and claims of “alternative” technologies. But if the global economy slows down, i don’t care how much you love a company; if demand drops, the desired funding for a mine who’s feasibility study isn’t so great – will probably not be available.

      Several countries in South America are also discovering manganese deposits. We all know who is interested in South American countries.

      • On May 18, 2012 at 3:49 pm,
        Big Al says:

        True Mark Alan,

        I am still not selling my stock!

        Big Al

      • On May 18, 2012 at 6:07 pm,
        John W. Robertson says:

        It’s a good question Mark. The manganese at Art. Peak is relatively low grade (1%), but they can extract it very efficiently and cheaply with the new process AMY is patenting. Can’t remember, but think they heap leach something like 90% of it out (someone correct me if I’m confusing this incorrectly with another company, but think that’s more or less correct). Other deposits in other areas would require their own unique chemistry to be determined before any mining can start. American Mang has a pretty good lead on others. It’s also a semi-rare metal in the sense that manganese currently has to be imported to meet North American needs, so being a domestic supplier will be a guaranteed market. That said, AMY wants to sell their stuff at a higher premium, so who know what the actual revenues will be when the stuff is actually being made.

        • On February 3, 2014 at 8:14 pm,
          Open says:

          Again, that would be your opinion but, I will stand by mine. So, on this, we would have to agree to digrsaee. My concern is with the functionality of the county should Measure 2 pass, and I see a never-ending, logistical and financial nightmare hitting us square between the eyes with this measure. I’m on record with my concerns and stand by those as well.Thank you again for your opinion.

    • On May 18, 2012 at 3:46 pm,
      Big Al says:

      Hi Mark Alan,

      Well, as you know I am a shareholder and I am not selling at this point.

      It is what it is!

      Big Al

      • On May 18, 2012 at 4:03 pm,
        Mark Alan says:

        And THAT’S why Big Al…

        You da MAN!!
        Have a great weekend and I am looking forward to another great show! I can’t thank you enough for all you do! And I think everyone on this site feels the same.

        stay frosty Big Guy

        • On May 18, 2012 at 4:09 pm,
          Big Al says:

          Well okay, just had a couple of Guinness’s in D,C, Maybe I will take your advice and have a few more!

          Best,

          Big Al

          • On May 18, 2012 at 4:12 pm,
            Jerry O^OTB says:

            HEY AL…,.DID YOU GET OVER TO FORD’S THEATER….where Lincoln was shot…

  2. On May 18, 2012 at 1:07 pm,
    Mark Alan says:

    One last thing…

    Thanks Big Al and Cory for provided such a well explained and in depth discussion regarding AMY. This is what makes this site so damn good!

    stay frosty

    • On May 18, 2012 at 2:45 pm,
      Cory says:

      Thanks Mark, I’m hoping the markets (or at least the commodities sector) improve so that companies with properties that could be profitable at reasonable market prices can raise the funds needed. If not we may see companies go broke and have majors or the government step in and take them over for a fraction of the price.

      Cory

  3. On May 18, 2012 at 3:06 pm,
    Max says:

    Cory, you kept saying Magnesium.. It’s Manganese, not magnesium lol!
    I’m pretty pissed with the SP, especially since I bought in the .30′s 2 weeks ago!!!!

    • On May 18, 2012 at 4:00 pm,
      Big Al says:

      HI Max,

      We realize it is magnesium. This is the first time Cory has done a project like this one and I, for one, think that he did a great job!

      Pretty pissed? Welcome to the ups and downs of the resource market. I still am not at all concerned about this one.

      Big Al

      • On May 19, 2012 at 5:15 am,
        Big Al says:

        Morning Max,

        Another typo from the “old guy” I mean manganese!

        Too much Guinness when I replied yesterday!

        Big Al

        • On May 19, 2012 at 5:26 am,
          Max says:

          Don’t get me wrong Al, I was just correcting him! This doesn’t take anything away from the audio segment. It was really good and look forward to more of Cory’s commentary.

          You’re right Al, the resource market is screw*ng us left and right these days. Got to sit tight.
          May I ask, what is your average cost for AMY, and have you spoken to Larry since the PFS?

    • On May 18, 2012 at 6:12 pm,
      John W. Robertson says:

      Max,

      Though based on old info from December, my estimated high for AMY in the future (perahps 2016-2017) is a minimum $8/share, possibly as high as $20. That’s in today’s dollars. If they produce the manganese they say they will, and sell it for the margins they want to, that’s what the stock WILL be worth in 4-5 years.

      • On May 19, 2012 at 5:28 am,
        Max says:

        Hi John,

        I was at Cambridge House a few months ago, and some people think just like you that it’s a 20$ stock (with the previous numbers). So lets say we cut that by 4. Still potentially a handsome reward! Just sick of having to wait.. Getting farked left and right this year: PEM, AMY, SSP. And these are all fundamentally interesting companies..

        • On May 19, 2012 at 12:34 pm,
          John W. Robertson says:

          Yeah, I know. Just keep some cash dry, like Rog has been saying. Some of this stuff is really going on sale, really cheap. I don’t mind buying at .45 last month, and then again at .22 next month, if the company’s prospects have neither worsened, or (hopefully) have even improved.

          $10.00 / .22 = 45 bagger

  4. On May 18, 2012 at 5:26 pm,
    Donald says:

    This is a big big setback for AMY. I will miss Larry’s voice, “Do the math!!!” if this company goes under. I like him because he has straightforwardly explained the speculative nature of the project in the past and was pretty good at explaining the manganese market. This is a speculative stock with the cost/risk of a speculative stock. Excellent report. I am impressed that Al is sticking with the stock.

    • On May 19, 2012 at 5:16 am,
      Big Al says:

      Morning Donald,

      Larry is a really good guy!

      Don’t worry about missing him because he is not going away!

      Big Al

  5. On May 18, 2012 at 5:43 pm,
    Gary Wilson says:

    Thanks Cory, you answered all my questions except when is the market going to turn around ? Good Work GW

  6. On May 18, 2012 at 7:09 pm,
    Irwin says:

    this is off topic;

    All day I’m thinking … what’s wrong with this picture?
    Everywhere I turned, the business channels, the news channels, at the coffee shop, at the post office, it was all about Face Book. Now if the markets were at a top it would be easy to say – “all the hype is obviously a sign of a major top”. But SPX is 9% off the recent high and falling fast; not exactly a deep correction – not a lofty top either, so I don’t know what to make of it.

    The opening paragraph of this article (linked below) confirms my suspicions.

    [quote]There is a strong possibility that the Facebook IPO marks the beginning of the next big leg down in this secular bear market in stocks, which began in earnest in early 2000. While the business of model of Facebook has validity, the value placed on it by investors is entirely absurd. The only mechanism that will prevent a big flush in the stock market is the commencement of a massive QE3 initiative by the Fed. If this should occur, gold will do a moon shot and purchasing value of the dollar will futher deteriorate.”

    http://truthingold.blogspot.ca/2012/05/facebooks-ipo.html

  7. On May 18, 2012 at 3:04 pm,
    Mark Alan says:

    Afternoon Joseph

    i am going to stress something that I believe has already been stressed by several stock analysts who have spoken on this site and that is this:
    Costs can be associated with poor management. This doesn’t mean that a mine will not have fluctuations over time, because that is normal. But too many CEOs want to live rather lavishly than spend the time making a company. Sorry, but that is the way I have seen it for quite some time now. There are a lot of junior producers right now whose costs are between $1100 and $1250 per ounce of gold. That stinks! Yet, they are out there promoting all the high grade drill results they get. Who cares about your high grade results if you can’t efficiently bring down costs! Why does a $60 million market cap junior need 8,9, or even 10 managers or board members? that”s insane!

    Low share structure, or high insider investment (skin in the game)
    Cash in the bank to last them for the next year
    Top management who knows how to relate to the locals and investors
    Low number of warrants preferred
    Management who spends more time advancing the mine than talking about a mine
    CFOs and finance officers with good relations to strong banks
    Geopolitical stability and good infrastructure.

    stay frosty and have a great weekend

  8. On May 18, 2012 at 3:50 pm,
    Big Al says:

    No Joseph, I really don’t think so. I still am very comfortable with my position in AMY.

    Best,

    Big Al

  9. On May 19, 2012 at 5:12 am,
    Big Al says:

    Morning Joe,

    There are some major differences between AMY and PEM.

    Big Al

  10. On May 18, 2012 at 3:56 pm,
    Big Al says:

    The comment that I would make here, Mark A, is that Larry does not spend money frivolously. I will have a complete breakdown on that issue next week.

    Cory did a great job, huh!

    Big Al

  11. On May 18, 2012 at 3:57 pm,
    Big Al says:

    Hi Joseph,

    I still think, for me, this is a good investment. Time will tell and this is not investment advice!

    Big Al

  12. On May 18, 2012 at 4:07 pm,
    Mark Alan says:

    Hey Big Al

    I’m not accusing Larry of bad spending habits or AMY in general. I was ranting about MANY OTHER juniors out there that are in the words of Brent Cooke and Mickey Fulp “moose pasture” Sorry, I did not mean to make it sound like AMY is this way. I was just trying to inform people that there are a lot of companies out there that market and don’t produce. That’s all

  13. On May 18, 2012 at 4:11 pm,
    Big Al says:

    Yes, Mark Alan, there definitely are. I would say probably as high as 80%.

    Trust me, I have been stung a few (maybe more than a few!) times.

    Staying frosty,

    Big Al