03.05.2005:
GPXM - Your cash flow numbers are a bit high, but your earnings look about right. This is based upon feedback I had with GPXM IR dept (spoke w/CFO on 4/20). Based upon Moly in the low 30`s he was saying that cash flow would be about 5 to 5.5 mil per month and GXPM`s share earnings wise would 2.5 to 3 mil profit per month.
JV partner is responsible for all royalties so their net effective ownership is closer to 75% vs the 60% often cited. Agree it does look too good to be true. I`m bothered that insiders don`t own more considering what`s on paper. I`m guessing it still trades at a discount since production was promised as early as Dec 2004 last year so we`ve had some delays. Not to mention the company needs this mine just to survive (imho). Per IR they`re cash flow positive now, but unless they get this mine into production soon I may start to question their continued existance. The other major reason is of course moly prices. How long will they stay at these levels? I agree this stock could trade up to $2+, but we`d need at least 3-6 months of full production at these moly prices to get there. Maybe longer, maybe a bit shorted. All depends on sentiment of course. My basis is around .14, but I have plenty (more than CFO), so I won`t be buying more till production news. FWIW, they`re also looking to renegociate their Contract property debt w/their JV partner. This could also be a ST catalyst going forward. Not as much as Ashdown, but it could help the stock pop anywhere from .03 to as much as .10 imho one-time basis.
Today`s % move combined with the volume today is encouraging. Still only about 2% of my overall portfolio though
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