Trinity Investment Research is busy again. I never miss a chance to review the brochures they mail to me. Today's spotlight is on Tungsten Corp. (TUNG), riding a wave of Internet chatter about Warren Buffett's supposed interest in tungsten. It's true that his Berkshire Hathaway's IMC has backed Woulfe Mining, but that doesn't necessarily mean the Oracle of Omaha suddenly likes metals. He has always been averse to investing in commodified industries and prefers things with durable advantages. Korea is a dominant tungsten producer, so a presence there is rather durable.
Tungsten Corp.'s President is not a trained geologist and (based on his published bio) has not run a mining company until now. Their VP is a geologist. That's nice but I'm not impressed yet. They'd be more impressive if they could show measurable progress toward operating a mining project.
They are exploring projects in Idaho and Nevada. They have an option on the Nevada property, which in the single photo available appears to have no existing infrastructure. They have another option in Idaho near an area that used to be actively mined. I'd rather see 43-101 compliant reports than options on pieces of history. We may not see 43-101 data because this is a US-listed stock with no Canadian ticker, so there's no impetus for them to follow the Canadian reporting regime.
I've checked out their annual report dated April 26, 2013. They had no revenue and just over $5k in cash on hand. They did raise $500K on April 8 but their expense projection of $650K over the next twelve months implies they will have to raise more money later in 2013. Shareholders can expect dilution from further fundraising. I do not understand why a company with this kind of risk has a market cap of almost $64M.
It sure would be nice if Trinity Investment Research publishes a follow-up piece to tell us all how well this stock does in a couple of years. I don't need a follow-up because I'm just not interested.
Full disclosure: No position in TUNG or other companies mentioned at this time.
