Mercenary Geologist Mickey Fulp wasn’t able to make it to PDAC this year, but that doesn’t mean he wasn’t watching what went on at the conference. In this video, Fulp delivers interesting information about the finances of some companies in attendance, also touching on issues currently plaguing many major gold miners.
Mercenary Geologist Mickey Fulp wasn’t able to make it to PDAC this year due to adverse weather conditions, but that doesn’t mean he wasn’t watching what went on at the conference. In this post-PDAC video, Fulp delivers interesting information about the finances of some companies in attendance, also touching on issues currently plaguing many major gold miners.
In terms of PDAC, Fulp reiterates his view that the TSX Venture Exchange is home to “zombie miners” that by all rights shouldn’t still be listed there — namely “companies that are not solvent.” He cites a study done by Tony Simon that indicates that “600 of the 1,200 exploration and mining companies [listed on the exchange] … have negative working capital,” and points out that 52 of the companies that paid for a booth at PDAC are on Simon’s list.
“How are these companies that have no cash and have in some instances millions of dollars in negative working capital … how do they afford to have an exhibitor booth at PDAC? Because those booths aren’t cheap,” he quips.
In terms of major gold miners, Fulp answers some questions about subjects he’s touched on in videos with the team at Ciper Research, explaining that while such companies are inconsistent in the way they report their costs, it’s also partially an issue with reporting regulations. “It’s a combination of reporting regulations that allow accountants to essentially cook the books, but the miners have been very guilty of exploiting those loopholes,” he states.
Ending on a happier note, Fulp mentions a couple of companies he does like: Uranium Energy (NYSEMKT:UEC) and Nevada Sunrise Gold (TSXV:NEV). He describes the former as a contrarian play and notes that it is “the most highly leveraged domestic producer in the United States to a higher spot uranium price.” The latter holds 21 percent of Pilot Gold’s (TSX:PLG) Nevada-based Kinsley Mountain project, which “has potential to become the next big gold play in Northeast Nevada.”
Watch the video below for more of Fulp’s thoughts.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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