This was created on November 9, 2008
I feel this security is undervalued significantly and would like to put my thoughts into a physical form, which is always a useful practice. This is a company in Canada that has interests in mining exploration projects in various parts of China. I feel Minco Gold's share price will go back to the 50 day moving average shortly (.44) and could even see the 200 day moving average (.85) by the end of March.
The current price is 0.38.
I began investing at 0.33.
Gold miners that can successfully find gold reserves will explode in value when the United States currency (dollar) collapsed in value (Weimer) and the stock market crashes (Dow to 1400). I do believe there will be a rally till the end of march, but then the dow will go to 10% of its peak, just like in 1929.
Minco also holds no debt.
Minco has a beta of 1.86, which indicates it will significantly outperform the market during bear market/crash rallies.
Minco has a good book value of .18c compared to current price .38c.
Minco has an excellent current ratio of 2.611 indicating assets can easily support current liabilities.
Future cash flows will be exponentially higher due to rapid appreciation of gold. Likely gold to dow ratio will reach 1 to 1.
Physical gold is basically not possible to buy, soon the comex will break from people demanding delivery,and gold will rocket.
Keep in mind during the first depression some gold miners went up 500 plus percent in only a few years.
The company was selling equal to Net Working Capital, a measure often used by Benjamin Graham, Warren Buffet's mentor. Hence, Buffet likely considers these characteristics.
Management seems able, as witnessed in their SEC filings, and personal email correspondence.
Minco has interest in China, which will see tremendous economic growth. Jim Rogers often compares China to the United Stated in 1900.
The short interest went to 0% on Oct 10 2008.
My holding period will be until the end of March, then I will reevaluate the economic situation.
Tyler Kirkwood
