Comments on: With gold futures turning back up, junior gold miners should sparkle

By: We interrupt this carnage to bring you these special announcements

We interrupt this carnage to bring you these special announcements — Wed, 01 Aug 2007 23:23:17 +0000

[...] producing mine and to establish a platform for the growth of Western Goldfields.” With the stock up over 30% since my purchase two months ago, I don’t mind [...]

By: MS

MS — Thu, 14 Jun 2007 21:10:01 +0000

Amit,

I'm more than happy to discuss ideas and even entry points, but I don't share specific stops.

I don't do it for two reasons. First, it would allow readers to shoot against me. Second, stops are only a part of my money management scheme, which also involves position sizing and systematic scaling out. I'll talk more about the scheme over the course of the summer.

By: Amit

Amit — Wed, 13 Jun 2007 01:28:19 +0000

what are your stops for UXG ?

By: MS

MS — Sun, 10 Jun 2007 05:21:47 +0000

Thanks for your comment. I have not had time to take a close look at Nautilus, but I'd be very careful about extrapolating ratios from operating companies onto an unproven junior miner, especially one that plans to mine underseas.

Do they generate any revenues currently? If so what are their lifting costs and total costs per ounce?

Also keep in mind the cost of carry and dilution when valuing reserves.

What do you think are the best sources for information on Nautilus besides the company's website? As a pink sheets co. it doesn't file periodic reports with the SEC. Not sure about SEDAR.

By: OpenBorders

OpenBorders — Tue, 05 Jun 2007 17:54:22 +0000

Hi MS,
I have been following an exciting story for a few months now and wanted to share it with some of your readers to get additional feedback. A few months ago, I sent a similar e-mail to the CEO of Nautilus Minerals (NUS.v or NUSMF in the states) a small company ($600m+/- MCap) wondering if he might be able to provide some perspective for me on the scale of their truly unique seafloor mining opportunity. It seems to me the relative richness or cheapness of NUS's shares depend upon the tonnage of extinct smoker sulphide deposits that exist.

One way to value the venture would be to back into the valuation. (numbers based on prices at the time I wrote this to Mr. Heydon) At between US$3.75 and US$4 per share, NUS has a fully diluted MarketCap of approximately US$600 million. Looking at mining comps I note that companies with market caps about 8 times that or US$4B - $5B have annual revenues of between $350M (Minas BV SA), $510M (Agnico-Eagle) and $700M (Kinross).

So in essence, new investors would be paying fair market value if NUS were finding 1/8th the revenues as the above (assuming a similar cost of extraction): $40M to $80M worth of gold, silver, copper etc. Some quick math using current spot prices would indicate that you need to be able to find about 85,000 tons of material with mineral levels equivalent to (these are lower numbers than the NUS website touts from a previous find):

8 g/t gold
220 g/t silver
8% copper
3% zinc

So how many tons of cold smokers do you estimate are available? In the world? Just in your 15,000 mile PNG concession? There are thousands of miles of fissures throughout the Ocean bottoms, some are not readily reachable due to prohibitive depth. But this might be a problem that future technological advancements can sovle while the low hanging fruit is plucked closer to shore. I am long a starter position in the name (few 1000 shares) but would consider loading up if more certainty could be established.

Their story gets me going everytime I hear/tell it. Any thoughts?

CP