Oreninc & Aston Bay in the Calandra Report

In the most recent Calandra Report, Thom Calandra uses quotes from Oreninc MD & Aston Bay CEO Benjamin Cox, and features Oreninc data. The Calandra Report is a regularly-published article on topics relating to the mining and metals industry. You can subscribe here. The following article is reproduced here with permission.

An Afghan name Malik: And Barkerville, Aston Bay, Oreninc, Colt, Redstar, Avanti

October 29, 2013

TIBURON, California -- I met Benjamin Cox a few weeks ago. In Toronto. He has opinions, fortified by numbers.

I remember when we were MarketWatch and CBS MarketWatch, and I helped come up with the slogan, The Story Behind The Numbers.

In resources, that translates: The Numbers Having Buried The Story, This Company Is Shtupped.

Benjamin is from Oregon. His Oreninc is homegrown and operates from Vancouver, Washington, USA. He tells me it is difficult for most of us to track what can be 1,500 or more raises, or financings, for mining equities each year -- Canada we are talking.

http://oreninc.com/about-us is the home.

Benjamin and his team are English majors, French majors, psychology majors ... and your smattering of CFAs, law degrees and MBAs. Portland State, Lewis & Clark, Harvard, U. of Portland. Their data are quite easy to scan. 

The Oreninc team also have hands in a metal company or two up Nunavut way. Aston Bay Holdings, copper and zinc up north, is one. (BAY in Canada -- tightly held, toit share structure, like Mick Jagger)

Oreninc has data flushes that tell investors who the good guys are in Canada mining financings ... and who the bad guys are.

The analytics firm also does video, some contextual analysis in short reports, for instance, Rio Tinto's bottom shelf sale of property to Shanxi Donghui in China recently.

I asked Benjamin a question that is on resource aficionados' minds as we approach year's end. No not about Barkerville's $15 million loan facility. (Actually, that was my second query.) Instead: Wottup with mergers, acquisition, asset purchases, changes of control, Benjamin?

"I think majors are sharpening their pencils, but they are afraid of pulling the trigger too early. Once the majors start to buy they will buy them quick, and there will be 3-4 months of clean-up of the good names," he says

"However, it is hell to have as an investor your best companies going for a song, and your worst companies going back (to financing fields), leaving you with the trash in the middle. 

"At some point you have to take the deal if you are management, even if your regret it 2 seconds later."

Thanks Benjamin. I feel that way about Bellhaven Copper & Gold on the financing end -- 5-cent a share deal (Do I stay or Do I go?); about Avanti Mining, which continues to issue shares for payment of debt (and has scheduled what could be a special special meeting December 4 for a dwindling number of molybdenum-loving stakeholders --  more news likely from company later this week on the meeting).

I get nervous, this morning case in point, when I see some of our TCR 8 companies going off in directions that take me almost entirely by surprise: for one, Colt Resources (GTP in Canada) looking at Middle East metals projects -- Afghanistan, Iran, Pakistan. Mr. Malik Shah Baluch is now advising Portugal and Quebec's Colt Resources. He hails with political connections from Afghanistan's Balochistan.

What do I know about some guy named Malik? Nothing. I still own all my Colt shares. Here is what goes through my head -- I bought Colt after the ticker came to life for me on a tour with the company; that is G(old) T(ungsten) P(ortugal). I need more background on this before I decide what to do with my shares and Colt's TCR 8 status. (Eight companies, one list to rule them all.)

The Allies want out of that part of the world, which is rich in copper, gold, kite runners ... and bloodshed. Yet Colt wants in? Wottup, Nikolas Perrault?

You see what I mean? Why can't I learn from my neighbours, here in my own cul-de-sac, and invest in solar stocks? (Well, I do own Natcore Technology, but I wish I owned a lot more of it.) Hey, I'll take an S&P Index fund, for profit's sake. Resources are so sucking wind right now.

The only other companies I follow, and own, that are NOT turning me into a nervous Nelson are NuLegacy Gold (one of our TCR 8 and on cusp of something near-surface BIG in Nevada, I believe; Natcore on the solar cells; BioCryst Pharma (still, many years of shingles watching that one -- hey, how would you like to be the only on at the dinner table praying for an avian flu nightmare?); Pilot Gold in Nevada and Turkey, no complains there and that one is another of the TCR 8.

I asked Benjamin about another subject: Barkerville Gold Mines up in the Cariboo trend of British Columbia, Canada. J. Frank Callaghan got structured cash, a lot of it, from Eric Sprott in Toronto. Good? Bad?

After all, Frank has a tremendous ability to promote, bit also has shown more than decade of high-rolling spending on his Barkerville. Someone once told me if you bought BGM shares near the beginning of their life many years ago for the equivalent of a dime, let's say, and held, they would be worth about two cents today. No idea how spot-on that is. But I do know theCariboo gold-silver trend has as colorful and gold-plated a history as does Mr. Callaghan. (See previous reports -- especially reader comments.)

"Frank had no choice, he needed money, no one was willing to buy the equity, and an equity deal was going to be very very painful. He needed someone to come in with some money, and Eric Sprott offered the money," Mr. Cox said. 

Barkerville shares were halted from trading for about 14 months and are now in their third week or so of trading on Canada's venture under the symbol BGM. The exchange required the loan-infusion to start trading again. The loan terms are complex but point to wins all around if the shares continue to reach fresh, post-halt highs.

As for analysis, we used to say, when I was a newspaper reporter in Arizona and New Mexico and Texas, etc, that a certain newspaper chain was all Cox and no balls. Not the case with Benjamin, who also has a substantive academic pedigree. Will BGM turn out to be all bark and no bite? All depends on how soon the gold starts pouring again next month, and at what price production.

"Would I have done it, don't know, depends on how sure Frank is he can produce gold," Mr. Cox says. 

Read the article in full here.