Post by bluediamonds on Sept 16, 2004 17:05:13 GMT -5
BOOK VALUE (.25+?) & HIGHER EXCHANGE by houstontex1110
By: houstontex1110
16 Sep 2004, 01:27 AM EDT
Msg. 82045 of 82229
Jump to msg. #
CECIL RHODES, CRITICAL MASS, SGGM, AND HIGHER EXCHANGE
I feel everyone will gain valuable insight into this life changing company of ours by reviewing the past...a short glimpse into the history of South African diamond mining. Bear with me, I will endeavor to connect the 4 topics in the title of this post so that a clearer picture of CMMK emerges.
The following quotes are taken from, Gemstones, Time-Life Books, 1983:
CECIL RHODES
"The two brothers who owned the farm were happier with their luck, but for different reasons. Staitlaced Boers, descendants of the early Dutch settlers of South Africa, they had no interest in prospecting and were overwhelmed by the rush of prospectors who swarmed in from nearby diggings, tearing up the land in a frantic search for diamonds. To make the best of a hopeless situation, the brothers sold the farm (which they had purchased for 50 pounds 11 years earlier) to a mining syndicate for 6,300 pounds, and moved on in search of peace and quiet. In so doing, Johannes and Diedrich de Beers unwittingly gave up a pair of fabulously rich diamond deposits, one of which would become the site of the illustrious Kimberley mine. DO NOT REPEAT THEIR MISTAKE BY SUPPOSING THAT 126 TIMES YOUR INVESTMENT IS A GREAT RETURN, and it is time to move on. History repeats itself. You know why? Every generation commits the prior generation's follies.
Early miners around Kimberley found their stones in "yellow ground," weathered rock of a type later named kimberlite. When they reached the bottom of the soft yellow ground and struck the "blue ground" that lay underneath, many miners thought their claims had petered out. But Rhodes, having consulted the few geologists in the area, suspected that the blue ground was very likely as rich in diamonds as the yellow.
If you were Urban Casavant, wouldn't you have studied the life of Cecil Rhodes inasmuch as he was the original great diamond prospector, and richly successful. Perhaps you could learn a few things from that shrewd Rhodes. Urban noticed the 2 brothers overlooked what they truly possessed, and sold out. (Same as modern day Debeers in Canada giving up their nearly 2 million acres of claims.)
Cecil Rhodes also made use of the best geological expertise he could locate. Just as Urban is using the most sophisticated magnetic surveys which endowed him with the knowledge of the immense value of those 2 million acres.
As events would soon confirm and geologists would soon understand, he was right as was UC. The blue ground was simply hard kimberlite that had not yet been broken down or discolored due to weathering. Worried or bankrupt claim holders were giving up on all sides, but Rhodes, undaunted by the low diamond prices and the unproven value of the blue ground, began buying up claims, as quickly as he could scape together the money. He organized his growing holdings into a joint stock company by naming it the De Beers Mining Company, Limited. Gee, who repeated this process?
Rhodes status in Kimberley was growing. He had a way of breaking his long silences with sudden passionate monologues that seized the attention of everyone within earshot. He once startled a group of miners by shouting, "You think I am keen about money. I assure you I wouldn't care a d**n if I lost all I have tomorrow. It's the game I like." Umm, I distinctly recall UC saying that discovering another set of valuable claims is real excitement. UC loves the hunt for the next set of claims or the next mining company to buy out or to exchange shares. Wow, with a trillion dollar critical mass valuation, no telling how many deals are standing in the wing just as you read this.
Rhodes showed little interest in the Rand(South African gold fields) at first and had to be goaded by his associates into buying gold claims. Gold simply did not have the same appeal for him as diamonds. Although eventually he came to be one of the biggest mine owners and, ironically, made a great deal more money from gold than he ever did from diamonds. I bet that the book written about UC, and his strategic moves will not point out how he overlooked gold's eventual rise to $1,000 per ounce. He is demonstrating that gold projects have a definite place in his grand design.
Just as Rhodes created an empire of diamonds, originating in Africa, UC will create the new empire of diamonds, originating in Canada. I can already hear the criticism being hurled at me. Have you ever noticed that people see the top dog in any industry as sort of invulnerable? As human beings, we see structures, firms, and even people as enduring forever. What a fallacy. Everything, including the Rock of Gibralter will ultimately disappear. Review the major corporations which once were a proud member of the Dow, and no longer even exist. Debeer's corporate life cycle in now in the downswing and as CMKM's trillion dollar valuation is established, they will no longer be viewed as THE Diamond Company.
CRITICAL MASS AND SGGM
For an atomic blast to occur, the heavy hydrogen must exist in sufficient quantity for the chain reaction to occur. Urban's plan as quoted in a previous press release, is for some sort of amalgamation of mining companies due to the fragmented state of the mining industry. Well, that is a fine goal, and any competent business man understands economies of scale and so on, but why is this goal apparently, rarely accomplished? IMO, it's because no one firm has sufficient mineral wealth to attract a wide spectrum of mining interests to achieve a truly efficient conglomeration. CMKM in assembling IMO, a trillion dollar plus valuation, has packaged a critical mass. In short, they can give up 25% of their claims in deal making and as the saying goes, not sell the family farm. CMKM will have left over, plenty of mineral interests to not lose their competitive dominance in the future diamond industry. Importantly, from the perspective of their suitors, the diamond mining is widely held as the ace of spades in the industry. Why? The return on investment is just about as good as it gets, and the mines can endure for decades.
IMO, this high return on investment helps esplain the basis for these various companies joining our growing family. The Blusson brothers are known throughout the mining industry and could have naturally struck alternative deals. Why CMKM? For one thing, the brother with a PHd. specializes in diamonds, and reviewed the entire range of firms in the area. Obviously CMKM stands out at The future Diamond Company in Canada. And notice how the market has reacted to SGGM. Let's break it down in terms of numbers. Our 250 billion shares in SGGM at .50pps is hovering around $125 billion dollars. If you take 5% of 1.9 million acres, that works out to 95,000 acres valued at $125 billion. Debeers' 58,000 acres is valued at upto $80 billion. If you divide 58 into 80, and 95 into 125, the values are respectively, 1.4 and 1.31. Is the market believing that the upper Debeers valuation is justified? Let's see if SGGM rises just a little over 5o cents, striking a resistance level, and then reverses. Markets have a tendency to move upto the next resistance level and tests it. At the resistence price, some bulls lose faith, and bears begin to short. Then, which ever group with the greatest combination of funding and faith win out. I bet the resistance holds, and SGGM will at least not bypass 60cents,unless a forthcoming PR reveals new claims deposited into the SGGM shell. Have you ever seen a shell skyrocket as fast as SGGM?
I realize that a minority of posters will leap to the conclusion that SGGM is way overvalued. Why? Their reasoning is that if 5% of our claims are worth 125 billion, then logic dictates that 100% of CMKM is worth a ridiculoud 2.5 trillion. My counter argument is that you can not have it both ways. If one agrees with Debeers that their 58,000 acres is genuinely worth $80 billion, then consistency demands a CMKM valuation of 2.5 trillion. Unless of course one presupposes our land is inferior to Debeers on an acre by acre basis. No one can answer that with certainty, but based on our magnetic survey which revealed oreo size kimberlites and hundreds of anomalies, you are hard pressed to prove our inferiority. These posters must then attack Debeers $80 billion valuation as being excessive.
Besides, right next door in Canada, the oil sands are valued at least $7 trillion. Massive mineral deposits are worth trillions, and all evidence so far indicates CMKM with stunning vision locked up this regional mineral deposit.
By: houstontex1110
16 Sep 2004, 01:27 AM EDT
Msg. 82045 of 82229
Jump to msg. #
CECIL RHODES, CRITICAL MASS, SGGM, AND HIGHER EXCHANGE
I feel everyone will gain valuable insight into this life changing company of ours by reviewing the past...a short glimpse into the history of South African diamond mining. Bear with me, I will endeavor to connect the 4 topics in the title of this post so that a clearer picture of CMMK emerges.
The following quotes are taken from, Gemstones, Time-Life Books, 1983:
CECIL RHODES
"The two brothers who owned the farm were happier with their luck, but for different reasons. Staitlaced Boers, descendants of the early Dutch settlers of South Africa, they had no interest in prospecting and were overwhelmed by the rush of prospectors who swarmed in from nearby diggings, tearing up the land in a frantic search for diamonds. To make the best of a hopeless situation, the brothers sold the farm (which they had purchased for 50 pounds 11 years earlier) to a mining syndicate for 6,300 pounds, and moved on in search of peace and quiet. In so doing, Johannes and Diedrich de Beers unwittingly gave up a pair of fabulously rich diamond deposits, one of which would become the site of the illustrious Kimberley mine. DO NOT REPEAT THEIR MISTAKE BY SUPPOSING THAT 126 TIMES YOUR INVESTMENT IS A GREAT RETURN, and it is time to move on. History repeats itself. You know why? Every generation commits the prior generation's follies.
Early miners around Kimberley found their stones in "yellow ground," weathered rock of a type later named kimberlite. When they reached the bottom of the soft yellow ground and struck the "blue ground" that lay underneath, many miners thought their claims had petered out. But Rhodes, having consulted the few geologists in the area, suspected that the blue ground was very likely as rich in diamonds as the yellow.
If you were Urban Casavant, wouldn't you have studied the life of Cecil Rhodes inasmuch as he was the original great diamond prospector, and richly successful. Perhaps you could learn a few things from that shrewd Rhodes. Urban noticed the 2 brothers overlooked what they truly possessed, and sold out. (Same as modern day Debeers in Canada giving up their nearly 2 million acres of claims.)
Cecil Rhodes also made use of the best geological expertise he could locate. Just as Urban is using the most sophisticated magnetic surveys which endowed him with the knowledge of the immense value of those 2 million acres.
As events would soon confirm and geologists would soon understand, he was right as was UC. The blue ground was simply hard kimberlite that had not yet been broken down or discolored due to weathering. Worried or bankrupt claim holders were giving up on all sides, but Rhodes, undaunted by the low diamond prices and the unproven value of the blue ground, began buying up claims, as quickly as he could scape together the money. He organized his growing holdings into a joint stock company by naming it the De Beers Mining Company, Limited. Gee, who repeated this process?
Rhodes status in Kimberley was growing. He had a way of breaking his long silences with sudden passionate monologues that seized the attention of everyone within earshot. He once startled a group of miners by shouting, "You think I am keen about money. I assure you I wouldn't care a d**n if I lost all I have tomorrow. It's the game I like." Umm, I distinctly recall UC saying that discovering another set of valuable claims is real excitement. UC loves the hunt for the next set of claims or the next mining company to buy out or to exchange shares. Wow, with a trillion dollar critical mass valuation, no telling how many deals are standing in the wing just as you read this.
Rhodes showed little interest in the Rand(South African gold fields) at first and had to be goaded by his associates into buying gold claims. Gold simply did not have the same appeal for him as diamonds. Although eventually he came to be one of the biggest mine owners and, ironically, made a great deal more money from gold than he ever did from diamonds. I bet that the book written about UC, and his strategic moves will not point out how he overlooked gold's eventual rise to $1,000 per ounce. He is demonstrating that gold projects have a definite place in his grand design.
Just as Rhodes created an empire of diamonds, originating in Africa, UC will create the new empire of diamonds, originating in Canada. I can already hear the criticism being hurled at me. Have you ever noticed that people see the top dog in any industry as sort of invulnerable? As human beings, we see structures, firms, and even people as enduring forever. What a fallacy. Everything, including the Rock of Gibralter will ultimately disappear. Review the major corporations which once were a proud member of the Dow, and no longer even exist. Debeer's corporate life cycle in now in the downswing and as CMKM's trillion dollar valuation is established, they will no longer be viewed as THE Diamond Company.
CRITICAL MASS AND SGGM
For an atomic blast to occur, the heavy hydrogen must exist in sufficient quantity for the chain reaction to occur. Urban's plan as quoted in a previous press release, is for some sort of amalgamation of mining companies due to the fragmented state of the mining industry. Well, that is a fine goal, and any competent business man understands economies of scale and so on, but why is this goal apparently, rarely accomplished? IMO, it's because no one firm has sufficient mineral wealth to attract a wide spectrum of mining interests to achieve a truly efficient conglomeration. CMKM in assembling IMO, a trillion dollar plus valuation, has packaged a critical mass. In short, they can give up 25% of their claims in deal making and as the saying goes, not sell the family farm. CMKM will have left over, plenty of mineral interests to not lose their competitive dominance in the future diamond industry. Importantly, from the perspective of their suitors, the diamond mining is widely held as the ace of spades in the industry. Why? The return on investment is just about as good as it gets, and the mines can endure for decades.
IMO, this high return on investment helps esplain the basis for these various companies joining our growing family. The Blusson brothers are known throughout the mining industry and could have naturally struck alternative deals. Why CMKM? For one thing, the brother with a PHd. specializes in diamonds, and reviewed the entire range of firms in the area. Obviously CMKM stands out at The future Diamond Company in Canada. And notice how the market has reacted to SGGM. Let's break it down in terms of numbers. Our 250 billion shares in SGGM at .50pps is hovering around $125 billion dollars. If you take 5% of 1.9 million acres, that works out to 95,000 acres valued at $125 billion. Debeers' 58,000 acres is valued at upto $80 billion. If you divide 58 into 80, and 95 into 125, the values are respectively, 1.4 and 1.31. Is the market believing that the upper Debeers valuation is justified? Let's see if SGGM rises just a little over 5o cents, striking a resistance level, and then reverses. Markets have a tendency to move upto the next resistance level and tests it. At the resistence price, some bulls lose faith, and bears begin to short. Then, which ever group with the greatest combination of funding and faith win out. I bet the resistance holds, and SGGM will at least not bypass 60cents,unless a forthcoming PR reveals new claims deposited into the SGGM shell. Have you ever seen a shell skyrocket as fast as SGGM?
I realize that a minority of posters will leap to the conclusion that SGGM is way overvalued. Why? Their reasoning is that if 5% of our claims are worth 125 billion, then logic dictates that 100% of CMKM is worth a ridiculoud 2.5 trillion. My counter argument is that you can not have it both ways. If one agrees with Debeers that their 58,000 acres is genuinely worth $80 billion, then consistency demands a CMKM valuation of 2.5 trillion. Unless of course one presupposes our land is inferior to Debeers on an acre by acre basis. No one can answer that with certainty, but based on our magnetic survey which revealed oreo size kimberlites and hundreds of anomalies, you are hard pressed to prove our inferiority. These posters must then attack Debeers $80 billion valuation as being excessive.
Besides, right next door in Canada, the oil sands are valued at least $7 trillion. Massive mineral deposits are worth trillions, and all evidence so far indicates CMKM with stunning vision locked up this regional mineral deposit.