Re: The Kimber Mastermind Group
in response to
by
posted on
May 29, 2008 03:31PM
Creating value through Exploration and Development in the Sierra Madre of Mexico
Chris, Kimber is in a class by itself when it comes to mining juniors. Why? Here's why.
1. Leadership: Jim Puplava has a large ownership stake in the company, enough to influence very heavily company policy and direction.
2. Stabilty: Kimber is in Mexico, one of the most stable places in the world to be located right now. You don't have the political risk you do in Russia, Ecuador, Venezuela or Columbia. There is much less of a chance of the government declaring a windfall profits tax like they very easily could do in the US or Canada when things get bad, as they will.
3. Blue Sky: Once again they are in the Sierra Madre. I once read a statistic that 1/3 of all the silver ever mined in the history of the world has come from Mexico. I can't say for sure whether that is true. But there is a lot of silver and gold there. It's been being mined for a long time, and most likely will for a long time to come.
4. 2 million gold equivalent ounces. The next set of drill results, set to come out in another few weeks could possibly come close to doubling that amount.
5. Take over potential: Kimber is surrounded by producing mines. Fuel and commodity costs are rising. Exploration costs are rising. Big producers are going to have to go out and buy the ounces they need to keep production going. Palmarejo was recently sold for $200 per ounce in the ground when gold was less than $700. Kimber is selling right now for about $55 per ounce of gold in the ground.
These are all pluses, but the leadership behind Kimber cannot be overemphasized. Most of these junior mining companies are judged by numbers. But in reality, anyone who has ever started or run a business knows, numbers can mean next to nothing. Take a look at the number of first round draft choices in baseball that don't even make it to the Major Leagues. In other words, potential is a dirty word. In both baseball and gold mining. People make a company run. Most of the junior mining companies are not well led. Actually that can be said of companies in general. How many Steve Jobs' or Warren Buffett's are there? Most juniors are run by geologists who by and large are nice guys, and very smart. I had a lot of nice chemistry professors in college who were very smart, but that doesn't necessarily mean I'd want any of them running a business for me. One needs to have a Puplava or an Eric King involved in the mix somewhere, to swoop in and put a little fire into the program when people start doing screwy things as the managements of many of these gold juniors are occasionally wont to do. The time will come when the market will buy up these things no matter what the CEO's are doing, but Kimber will win whether that happens right away or not. I've only found a few companies in the whole space worth my time. Kimber is at the top of the list. I've looked at quite a few. If you'd like me to compare any of them head to head with Kimber, list the names.
Oh yes, and another good thing about investing in Kimber, when you talk about your investments with friends and relatives you can casually make the comment, "I'm sitting on a gold mine here." and smile the smile of a very clever person. Bull