Wednesday, October 14, 2009

KMKCF

Continental Minerals was brought to my attention by Tom Bishop, who publishes BI Research. This newsletter has been around a long, long time and has had an excellent track record of uncovering a combination of exceptionally strong fundamentals and/or grossly undervalued public companies. Although strictly a fundamental analysis oriented advisory service, Bishop is clearly one of the few who get it. He knows his stuff. (He is not an advertiser here and I pay full retail for my subscription to Bi Research).


KMKCF Weekly




This is a play on two huge copper-gold deposits owned by Continental near Tibet in mainland China. As Tom Bishop writes in his latest issue of BI Research:

"Okay let me spoon-feed the puzzle pieces and
see if you can put it together. China needs
resources like copper to fuel its economy. It’s well
documented that it’s been on a shopping spree.
Continental has lots of the stuff (1.9 BILLION
pounds, plus Newtongmen’s 2.8 BILLION) and has
advanced its project to the point it is knocking on
the door awaiting approval. There’s not much risk
left in the equation. But the project is in a land far
away. The Hunter Dickinson Group, located in
Vancouver and under whose wing Continental was
formed and operates, has a long history of buying
up floundering resource projects, getting them
financed, drilling them off, proving up a worthy ore
body and selling them off to the highest bidder."


KMKCF 90 minute




This morning, KMKCF is up about 5% at $1.40. Bishop thinks these shares are worth $3.00-4.00, minimum. Quoting again from the latest BI Research:

"Continental’s
Xietongmen deposit has 1.9 billion lbs. of
copper and 3.9 million ounces of gold reserves. At
today’s rates expected annual production works out
to about $450 million of revenue a year. The mine
is expected to cost about $600 million and have a
16% rate of return at $1.50 copper and $650 gold.
But using current metal prices which are now $2.90
and $1,053 (up $100 since last our issue), the
difference goes right to the bottom line, increasing
the rate of return to something way higher than
16%. On top of this, Continental has delineated a
second near-surface deposit on the property called
Newtongmen with indicated resources of 2.8 billion
pounds of contained copper, 2.3 million ounces of
gold and 11 million ounces of silver. I continue to
believe KMK is worth something in the $3-4 range
on a per share basis."



KMKCF Daily



The Daily chart is suggesting a move to between $1.75 -$2.50, which may not seem lot a lot from current levels, but Advanced GET has a tendency to revise it's projections upwards as stocks move up, something I expect as long as this rally continues.

My thanks to Tom Bishop for allowing me to share his work, BI Research is an inexpensive ($95 introductory annual subscription), fundamental analysis newsletter and a worthy addition a trader's arsenal.


A

11 comments:

Anonymous said...

Allan, what is Prechter and Neely say about the current market condition ...

Anonymous said...

ALLAN,

Thanks for bringing BI RESEARCH to light. I'm certain it will be good source of information.

However, your killer BWT software elegantly demonstrates what I've been seeing of late.

Many charts show trends that have been well underway for quite awhile!

Wouldn't it be prudent to wait for a market pullback before entering new longer term positions?

Position trader

Anonymous said...

Allan
Are you in at kmkcf
serge

Allan said...

I'm in KMKCF @ 1.34

Anonymous said...

Good luck then
lets hope another better than TGB is here

Anonymous said...

ALLAN,

Thanks for sharing your KMKCF entry.

My approach is to enter strong stocks on pullbacks, but this tells me pros don't always do that.

Reminds me of a quote:

"Novice investors like to put price limits on their buy-and-sell orders. They rarely place market orders. This procedure is poor because the investor is quibbling for eighths and quarters of a point, rather than emphasizing the more important and larger overall movement. Limit orders eventually result in your completely missing the market and not getting out of stocks that should be sold to avoid substantial losses." ~ William O'Neil

Position Trader

Anonymous said...

BAM is sticking to their prediction of 22% down in October ...

Anonymous said...

Good to see you helping to pick to stocks and staying away from predicting the overall market!

T said...

thanks for the info on the stock and the newsletter. I'll be looking into both.

T said...

...yeah,I think I's also wait for a pullback to the 129 area to buy.

Anonymous said...

The one thing I didn't care for was he charges quite a bit extra for email version vs real mail. Usually it's the other way to limit costs.