I first noticed Nevada Copper Corporation (Canadian ticker NCU.TO, US ticker NEVDF) back in mid-2014 when its stock was headed up to over two bucks a share. It looked for a while like there was something here besides a typical penny stock run-up. Let's take another look to see if there's anything still in this story.
Just look at these management biographies. Here we've got an accountant as CEO, forcing me to wonder what operational role the dude ever had in pulling ore out of the ground. Other folks on the team have been geologists and engineers, doing stuff that equates somehow to mining. The least I can say is that their headshots look nice. Maybe that's the most I can say without directly asking them whether they have personally run a profitable mine.
The one project they have is Pumpkin Hollow in Nevada. Admitting the preexisting surveys by other mining companies begs the question as to why those earlier explorers elected not to develop the property themselves. Sometimes that happens when larger, more successful mining companies realize they found a property that won't meet their investment criteria when they have more viable properties in hand. These Nevada Copper people have NI 43-101 reports on their website going back to 2006 and they are still drilling exploratory holes. Whenever I see a junior resource company taking that long to gather evidence, I have to wonder if there will ever be a final decision on production.
I had to suppress laughter when I saw that Nevada Copper's feasibility study kept the price assumptions for gold at $1200/oz and silver at $18/oz while they adjusted the copper price from their base case. I didn't even need to read their NI 43-101 report dated July 9, 2015 because they put those numbers right on the project's "feasibility studies" Web page. I realize the gold and silver are expected to be byproducts of this project's copper lode, but the least they could have done was run separate economic scenarios for each metal type. If I had turned in a sensitivity analysis like that as academic work, my MBA professors would have given me poor marks for sloppiness.
I looked through their unaudited quarterly financial statements for the period ending September 30, 2015. They had US$6.3M in cash on hand and showed a net loss of -$2M. The company must continue to raise capital so they can pay off more than $20M in short-term liabilities. Reading Note 5 on the details of their bridge loan facility is crucial. Nothing focuses the mind quite like a deadline. Compare the numbers in that note to the Current Liabilities numbers in the balance sheet. Just do it.
I never get tired of examining the entrails of such "opportunities" as Nevada Copper. I used to see plenty of junior resource companies at San Francisco investment conferences. They always had great stories about undeveloped properties that major companies had abandoned. Management was always raising capital to fund endless exploration, and they always paid themselves well. Investors in these types of companies must ask themselves why they keep paying up. The story never ends.
Full disclosure: No position in Nevada Copper Corporation at this time.
Just look at these management biographies. Here we've got an accountant as CEO, forcing me to wonder what operational role the dude ever had in pulling ore out of the ground. Other folks on the team have been geologists and engineers, doing stuff that equates somehow to mining. The least I can say is that their headshots look nice. Maybe that's the most I can say without directly asking them whether they have personally run a profitable mine.
The one project they have is Pumpkin Hollow in Nevada. Admitting the preexisting surveys by other mining companies begs the question as to why those earlier explorers elected not to develop the property themselves. Sometimes that happens when larger, more successful mining companies realize they found a property that won't meet their investment criteria when they have more viable properties in hand. These Nevada Copper people have NI 43-101 reports on their website going back to 2006 and they are still drilling exploratory holes. Whenever I see a junior resource company taking that long to gather evidence, I have to wonder if there will ever be a final decision on production.
I had to suppress laughter when I saw that Nevada Copper's feasibility study kept the price assumptions for gold at $1200/oz and silver at $18/oz while they adjusted the copper price from their base case. I didn't even need to read their NI 43-101 report dated July 9, 2015 because they put those numbers right on the project's "feasibility studies" Web page. I realize the gold and silver are expected to be byproducts of this project's copper lode, but the least they could have done was run separate economic scenarios for each metal type. If I had turned in a sensitivity analysis like that as academic work, my MBA professors would have given me poor marks for sloppiness.
I looked through their unaudited quarterly financial statements for the period ending September 30, 2015. They had US$6.3M in cash on hand and showed a net loss of -$2M. The company must continue to raise capital so they can pay off more than $20M in short-term liabilities. Reading Note 5 on the details of their bridge loan facility is crucial. Nothing focuses the mind quite like a deadline. Compare the numbers in that note to the Current Liabilities numbers in the balance sheet. Just do it.
I never get tired of examining the entrails of such "opportunities" as Nevada Copper. I used to see plenty of junior resource companies at San Francisco investment conferences. They always had great stories about undeveloped properties that major companies had abandoned. Management was always raising capital to fund endless exploration, and they always paid themselves well. Investors in these types of companies must ask themselves why they keep paying up. The story never ends.
Full disclosure: No position in Nevada Copper Corporation at this time.
