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3/8/10

Postcard from PDAC, 2010


Last year, reader Codename NRI (Nondescript Retail Investor) sent over some postcards with observations from the PDAC show in Toronto. The good news is that PDAC 2010 looks set for the same welcome deliveries and here's the first, as received by this humble scribe mere minutes ago.

Hey, hey, Otto. Nondescript Retail Investor (NRI) here in Toronto at Peedac and feeling some wear and tear the morning after the couple of receptions I visited after the presentations and booths were shuttered. A few highlights and low lifes:

Background: 2 years ago at Peedac when I was more dumb and gullible I believed the pitch of the slicks at explorationist Orko Silver (that OK.v would be taken out imminently by its JV partner, Pan American Silver) and shortly afterwards I bought shares at around $1.80 for a quick flip.

Spotting the OK booth and the guy there sitting in his couch and doing nothing, I sat down beside him and asked him when the OK exit strategy would manifest as I bought shares nearly 2 years ago and I was under water and I really would like this PAAS takeout to come to pass. This very glib guy told me that timing was PAAS call; and then exclaimed in dismay ‘you could have done very well; you didn’t buy at the top of the market, did you? Why didn’t you buy at 28c?’ (sidebar: the level the share price dropped to in late 2008) And then this he proceeded with his ‘all your own fault’ (conceded) ministration to lecture me on the old adage ‘ if you like a stock at $1.00, you should like it better at 70c’ ( yeah well, and if I believed a story at $1.80 and the price tag then gets discounted to 28c and the promised land is no where to be seen, I really am feeling that I’ve been conned and that my critical faculties need work. The OK guy should have been speaking in the Investors Forum

Yesterday a whole day of speakers, identified as letterwriters and analysts: Mickey Fulp, John Doody, Jay Taylor, Bob Moriarty, John Kaiser, David Coffin, Greg McCoach, Brent Cook. There were more, concluding with Rick Rule, a portion of whose presentation I listened to – and yes indeedy, Rick Rule did offer the adage that before you buy a stock for $1, you really should ask yourself if you’re going to like it better such that you’ll buy more at 70c). Returning to the couch at the OK booth… the glib guy offered me solace : PAAS was working on a feasibility study which would be finished in about 6 months and then it would happen… ‘hold on to your shares; you’ll get about five bucks’ . ‘But, but, but,’ said I , ‘doesn’t PAAS have a lot on its development plate with the Aquiline takeout?’ ‘Ah grasshopper, they’ll give you shares and that’s good; that’ll be no problem; PAAS shares are very liquid.’ ‘But, but, but, just because they release a feasibility study in 6 months (maybe) doesn’t mean that a takeout will immediately follow!’ ‘Grasshopper, they HAVE to make a production decision!’ Yup. I got it now and I’m feeling very mollified. So happy to be here at Peedac for these therapeutic encounters.

I went to Brent Cook’s presentation because I am all ears for what he has to say; and he started with a little intro identifying what he looks for with his last bullet being an exit strategy. He then invited Q’s which was an interesting succession of ‘waddaya think of this stock? waddaya think of that stock’. Stepping up to the mike, I noted that he had once admitted owning MAG Silver and reco’d it, so I asked him whether he still owned MAG.to and whether he thought they had an exit strategy which would materialize. Brent Cook said he still owns, that he believes the share NAV to be at least $15 and that sooner or later, be it two months or two years, Penoles will HAVE to take out MAG.to. Interesting… another fly in the ointment, best made plans of mice and men story unfolding or to be endured.

Observation : Rick Rule is a very captivating speaker. After his 20 minute presentation which was the last of the day, there was a scrum with about 50 people crowding around him and Rick Rule held court for at least an hour and a half.

I went to the silver reception at the Royal York organized by CPM on behalf of Silver Wheaton, Fortuna Silver, Endeavour Silver, Orko Silver (hopefully the beer I drank was charged to them), Great Panther and others. It was a very crowded affair which I attended last year as well It just occurred to me; ECU Silver (ECU.to) was one of the silver hosts last year and they were NOT last night. Huh! Checking the directory now I see that they do not even have a booth here at Peedac this year. Well, well, well…money must be really really really tight and credit cards are all max’ed out. Then again, maybe they’re all burning the midnight oil back in Velardena as they attempt to put the finishing touches on the fabrication of dore bar number 7 for the quarter.

More later, with much to tell …gotta go do day 2.


Final word: IR people manning booths at PDAC today, make sure you look after the rank and file when they come and visit you and not just the mining great'n'good. Cos one of them out there is NRI.