Cabo/Hommel

[TheSimpleton]

Did you guys catch this?

"...But enough about my market perspective! Time to discuss Cabo Mining Enterprises (CBE.V and CBEFF.PK for quotes at Yahoo! Finance).

After looking over many silver companies, I invested in Cabo Mining when I discovered that their property was in the "Silver Capital of Canada", Cobalt, Ontario. They now own 60% of what was once the world's largest silver-producing area! Historic production was half a billion ounces of silver for the Cobalt mining camp. How much is that? It's about half the historic production of Cour d'Alene--an area that has two silver miners with market caps near a billion dollars each, Hecla Mining and Cour d'Alene. Therefore, when I found out that Cabo Mining had a market cap of under $10 million, and owned 60% of the mining camp of Cobalt, it was all I needed to know to make a buying decision. In fact, when I bought, I made sure it was my largest holding--and I invested just under 10% of my portfolio into it.

After all, they say the best place to find silver is where they have found silver in the past, especially considering that modern mining and exploration methods have not been utilized in the area. Cabo's property in Cobalt is also surrounded by active major mining companies. There is a fascinating article detailing the history of the silver mining town of Cobalt, Ontario at www.cobalt.ca/cobalt/history.htm

I strongly suggest you read that article!

But the town isn't named Cobalt for nothing. Historic production of Cobalt for the mining camp of Cobalt was about 25 million pounds. And Cobalt prices have risen from under $9/pound to up to $33/pound recently, in less than a year! What a bonus!

Cobalt is used to make metal alloys. Cobalt is also used in cell phones, and many other very specific industrial and strategic applications.

But the story gets much, much better. The president of Cabo Mining, John Versfelt has for years, been keenly aware of, and anticipated, the turn around in the market for precious metals. I feel it is very important for a company president to be able to correctly anticipate market conditions, and to have a plan to take advantage of that. John does. Cabo Mining has options to buy two drilling companies.

One of the truisms (or jokes) about commodity trading is that sometimes the longs make money and sometimes the shorts make money, but the broker always makes money. (Perhaps that's why brokerage houses have market caps in the tens of billions of dollars.) Well, exploration companies may go boom or bust depending on drilling results, but the drilling companies always make money, just like the brokers... as long as they are kept busy with drilling work.

Well, by now, mining companies across Canada are filled with capital from recent private placements all due to the recent rise in the price of precious metals, and now they are anxious to drill. And on Jan 5th, John Versfelt announced that Cabo Mining secured an option to buy two drilling companies that, when acquired, should make Cabo Mining the fourth or fifth largest drilling company in Canada, and should be a very profitable business going forward, given market conditions.

These drilling companies should provide the cash flow that is rare for explorers to have. It may mean less dilution in the long run, as Cabo might be able to fund a significant amount of exploration work by themselves! How fortuitious for Cabo shareholders that John Versfelt had a vision and a plan, and had done a significant amount of his own market research! After all, knowledge is money!

As if all that is not enough, Cabo Mining just announced on February 4th, a major high-grade discovery as one geologist said, it's the first time in 40 years that such values have been found in the Cobalt, Ontario mining district. How did they make such a discovery? Seems simple, really. They looked where a very large "silver boulder" was found on their property back in the early 1900's. This boulder is 1,640 pounds, and contained 9,715 troy ounces of silver!

So basically, Cabo Mining went to the area, removed some overburden, found some veins, took soe samples, had them assayed, and discovered a new Cobalt-type silver zone! Their samples were very high-grade Cobalt and Nickel, and are the type that should lead to the silver.

The assay results ranged from trace to 2.6 ounces silver ... trace to .15 ounces gold ... (which is not very significant for the precious metals) but it also contained trace to 4.03% cobalt ... trace to 28.9% nickel ... and trace to 1.05% copper.

Although there are no estimates for tonnage, John Versfelt says, If you average these values out on a per ton basis, the results are actually quite amazing. So, at his suggestion, I did some 7th grade math to take an average of the Cobalt and Nickel values across the samples (which were each about the same size), and discovered the following:

Cobalt average 1.87625% x 2,000 lbs. x $26.00/lb. for Cobalt = $975.65 per ton. Nickel average 9.42875% x 2,000 lbs. x $7.00/lb. for Nickel = $1,320.03 per ton.

Based on today?s prices, the value of precious metals, strategic metals, and base metals is US $2,307.52 per ton. Although, again, there are no estimates for how many tons of ore might be there, it's still high-grade ore!

For comparison's sake, if the samples contained gold only, at $400/oz., the equivalent grade would be like ore that had over 5.5 ounces of gold per ton! If the samples contained silver only, at $6.50/oz., the equivalent grade would be like ore that had over 355 ounces of silver per ton!

A further drilling program is already scheduled for late February in that area, as well as two other known silver occurrences in similar geological settings.

Share Structure and Market Cap: Fully diluted subtotal, including shares needed to acquire two drilling companies, which is contingent upon which is contingent upon raising money when issuing shares= 18,880,436 as of February 9th, 2004 (Post-Consolidated) Plus a proposed $5 million financing to finance capital expenditures and working capital for the two drilling companies. @ share price $.57 Cdn x .76 US/Cdn = US $.43 (as of Monday, Feb, 9th) = $8.2 million Market Cap, U.S."

http://www.gold-eagle.com/editorials...mel021204.html

Your research monkey, TheSimpleton

[SilverStreak]

I wonder is this not what is called pumping and dumping ?????????????? DYODD

:albertein There is a fine line on this one. Mr. Hommel puzzles me. He is definitely a gambler when it comes to penny stocks -- buying thousands of shares at pennies and selling thousands at a one buck rise (to make thousands) -- but, he is a true believer when it comes to silver (and gold, to some extent). The combination of the two is....voila!....an endless search for penny mining stocks that he touts and which subsequently rise a buck or more in the next few days after his write-up. When asked if he sold those recommended stocks "around his core position" after his pumping commentary is almost solely responsible for the rise in the price, he responded only, "I won't say."

He participates with the big boys in the private placements, and there are restrictions on those, so I would trust the stocks that he reveals his placements in. He also reviews companies (he never really "recommends" since he isn't a broker or investment advisor, but he very enthusiastically discusses companies that leave you wanting to get in) that he openly reveals NO position in. As long as you know his own strategy and are willing to take the same pop-in-pop-out approach, you could just follow Mr. Hommel around and buy what he reviews. (Beware...I've never seen a "sell" review.)

I, however, am more conservative. I look for a stock that has long potential. I don't mind making a few bucks by selling around a core position, but I am not buying a million "core" (as he is in private placements) and mere thousands on the market around that core. I don't have many shares to sell when the price rises a few pennies. I have a personal belief that the majority of my positions are there to support a company that is worth supporting while preserving my wealth for the future.

The puzzlement comes from Mr. Hommel's outrage at people who are not believers in his economic views, which he admits are a result of his religious view, specifically the pre-millennial position of Biblical eschatology. While I am not one to spout that one's public life should be separated from one's religious life, this is a controversial area of theology, even amongst those who are likeminded in every other area of Biblical interpretation. Needless to say, that is another subject, altogether. One should be aware, however, that this interpretation of future events from the Bible greatly influences Mr. Hommel's economic outlook, which is prominent in his investment strategies. What you believe -- or at the very least, what HE believes -- is quite relevant when you read what he writes.

Mr. Hommel declares that his status as a Christian prevents him from "gambling" in futures, yet he obviously gambles when he plays the penny stocks, not believing that this is the same. And, he raves (calling them "idiots"......see his last free newsletter) about people who just don't get it with the silver-is-money stuff. I get it, and probably most of you here get it, but I do not assume that those who do not get it are idiots. They are misguided, or ignorant, or uneducated, or stubborn, or simply do not agree with Mr. Hommel. They may even have some underhanded motivation for getting-it and pretending they don't. Nevertheless, I don't find it very Christian, or enlightening to those who most need light (and to buy Mr. Hommel's stocks so the price will rise a buck or so), to belittle others for failing to agree with Mr. Hommel.

Mr. Hommel's reviews are also more on the commentary side, with no technical analysis. He will gladly tell you that he doesn't believe in technical analysis and calls it "gambling." I haven't figured that one out, yet, so I am, again, puzzled. I think TA can go way too far, especially when commentary is simply cut-and-paste from a company's website and the sparkling charts are the only original stuff. But I also don't think that basic statistics lie. Statistics plotted and analyzed give a precise picture of price trends and where some more research may be needed. God created mathematics, too.

There are several analysts and commentators who pump stocks like this. I have found some discrepancies and failure to reveal some telling facts among them. This could be from lack of thorough research (bad enough) or from selective omission (worse). It has made me cautious. Most of these people want you to subscribe to their newsletters by teasing you with free articles that give you good information (after paying subscribers get it first and run up the prices...which is after the analysts have bought the stock before the paying subscribers...so you're getting the highest price scraps by this time). I have monitored many of the stocks reviewed in this manner and find that most sink way down after a few weeks. I then buy or deny. I genuinely appreciate the information I can get free from these often well-educated and entertaining writers. After the hours, days and weeks I THEN put into researching the company, I just don't feel obligated to pay for the tip, especially when at least half of the stocks are not worth my money, based on my objectives.

A real pump and dump scheme is when a company has paid the analyst to recommend the stock in a collusive fraud to drive up the price. I don't think Mr. Hommel participates in this, nor do any of the other commentators you will find on Gold Eagle, 321Gold, GoldEconomy, etc. (But be careful of paid advertisers on these sites.) The INDIVIDUAL stake of the writer that is present, however, is something to be aware of and cautious about.

Cheers!

[lhslancers]

He advised selling Farallon a while back. Then got back in.

[lhslancers]

Redeemed beware the wolf in sheep's clothing.

:heeeellll Not to worry, Ish......In trying to be as humble as I would like others to be towards me (and my money), I am just presenting the known facts objectively. I don't know all the facts, but the red flags are flapping.

Cheerio! :afraid:

I am a bit skeptical of some of JH's stuff and an atheist to boot but in all fairness I thought that the last part of the article addressed some of the questions raised here and should be included.

The last part of JH's article:

I believe it is important to diversify, and to not invest all your money into one stock. The dollar, and stocks, can go to zero value.
Companies can go bankrupt, or quit. Silver cannot go to zero value. I believe a prudent investor should invest in silver first, and junior silver exploration companies second, and only with money that you can afford to lose. Cabo Mining is not making any money right now, and their future success is contingent upon issuing more shares to raise money to fund operations and development. I have not invested in Cabo Mining for their balance sheet, but for their assets and options to acquire assets. This article contains forward-looking statements that are uncertain. There are no guarantees, and there is risk involved in investing in junior exploration companies.

There is also significant risk in investing in one company based solely on reading an article on the internet, because widespread public exposure can cause a specific stock to move up in value inordinately.

A recent example is Silverado Gold, ticker symbol SLGLF.OB at Yahoo! Finance. If you are not familiar with what happened to Silverado Gold, take a look at the two year chart. It went from ten cents/share to seventy cents, and down back to ten cents again. You should do your own research and due diligence, as the SEC warns investors in an article here:

Internet Fraud: How to Avoid Internet Investment Scams www.sec.gov/investor/pubs/cyberfraud.htm

You can read the press releases and latest discovery at Cabo's new website at www.cabo.ca

For more information on Cabo Mining, do not email me. Contact John Versfelt, President of Cabo Mining at jav@cabo.ca or (604) 681-8899.

If you believe that Cabo Mining is a significant opportunity that the market has overlooked, then you should research further, not only Cabo Mining, but also many other silver junior exploration stocks, because if the market is not efficient (and I believe it is not) then it is most likely the market has overlooked other silver junior exploration stocks, too.

If you would like to receive, via email, my free weekly silver stock report that lists over 90 silver stocks, sign up at goldismoney.com

Final disclaimer: I own shares of Cabo Mining that I purchased both in the open market and through a private placement that came with warrants, and I have not been paid by Cabo Mining to write this article. SilverSeek does not own shares and did not receive any compensation for publishing this report.




February 10, 2004

Hi Cosmo,

Yes, the end of Mr. Hommel's article is an entourage of statements, generally made at the end of most of his articles, and are pretty much a longer version of the typical "disclaimer" (i.e. legal protection). I have found that he has begun to be a bit more specific in his disclaimers, perhaps due to increasing skepticism/criticism among readers. Part of the mystery in his perspectives (or at least what he states) is that he believes that silver is the answer to every economic problem, yet he states that silver stocks are high risk. He speaks as one who is investing long for growth and income on "the silver in the ground" (which implies "long" time before it's in your hand), yet he isn't taking much of that risk if he sells after being directly responsible for the incremental price increases of the stock as others buy.

One must know exactly what his "core" position is to truly know how much is sold-off after the pumping. It might be core=100, peripheral for sale = 874,900. Mr. Hommel purchased 875,000 shares of Cabo, as a professional investment advisor, which was 70% of a private placement in November 2003. As he states, he also bought shares on the open market. Good advice to not put all your money into one stock, but if I had a million shares in one company, and it represented only a fraction of the money I should be diversifying (and it is money "you can afford to lose," as Mr. Hommel advises), I wouldn't have the problem of needing to be overly careful which stocks I picked, especially if small investors were rushing to get in after my advice. In addition, I find it contradictory to state that a reason for diversifying into many silver stocks (which is virtually all Mr. Hommel is recommending) is that the value of the dollar can fall to zero. It will be zero in all the stocks if that happens, so what difference does it make if all my dollars are in one stock? Or, why buy stocks at all? Perhaps to dump them in a few months after a timely pumping in order to raise the soon-to-be-worthless dollars to buy physical silver?

There is no doubt that Mr. Hommel understands money. I agree with all that he says about the fraud perpetuated on the American people throughout history, with the loss of the gold and silver standards, the federal reserve, etc. It is honorable that Mr. Hommel takes the time to educate anyone who will read/listen (albeit in a rather overpowering manner that likely puts many off). Unfortunately, there isn't much I can do about the "system" beyond educating the few I can (my own children, for example) and moving on within the economy as it is. I certainly believe that mining shares, physical metal or shares, and base/basic commodities are the only safe place for investment with a profit and protection objective at this time. I just don't plan on taking my profits next week when I buy today.

Anyway, I am digging into Cabo. I will not invest in it based on the fundamentals. But, I am motivated now to see what is going on with this company. I have already seen no less than 40 insider transactions clustered around and between the November 2003 private placement, the February date of Mr. Hommel's review of the company, and the week after that article was written, many just filed yesterday. There are some connections that I am researching further. Research is made very difficult with the outrageously inefficient SEDAR and SEDI systems in Canada, the fact that the company is small, and some interesting events and facts within and about the company and those associated with it. I will report on my findings as they come to light, if anyone is interested. I would be quite pleased if what I find motivates me to buy the stock! Alas, that isn't usually what this kind of research produces.

An interesting note about Silverado in response to Mr. Hommel's using that company as an example of why his readers should do their own research. The problem with this logic is that the stock was touted, run-up, then bought by unwary investors before the inconsistencies with Silverado were revealed. AND, it was a journalist that revealed those inconsistencies. Even if the average investor had the time to conduct ONGOING daily research on his or her positions (to determine if the stock should be sold), it is unlikely that many would have noticed this situation with Silverado. In the case of Bre-X, an investor could have researched for years and not come up with a hint of the massive fraud involved, because no scientist, geologist or "expert" investment advisor had the putz to tell the world what they KNEW! Silverado and Bre-X do not make the case so much for the investor to do detailed research as it does for the investor to be wary of reliance on only one commentator and to thoroughly research the PEOPLE associated with the company. This is the trail that has most often influenced my own decisions. It might be wise to also seek out the commentary of journalists and skeptics. :D

Blessings! :dance:

Redeemed sez: I will report on my findings as they come to light, if anyone is interested.

Yep! Please and thank you.
Cosmo

This is a quick chart...with the java chart feature you can check the action by day...very interesting!

I love charts (graphs)......they give such a nice picture of major things going on...and a good direction in which to pursue information. (Do one for five years and you will see some very strange stuff.) The volume alone tells you a lot on this one. Much of it was private placements and insider transactions. I'm still checking stuff...will get back to you. Had no time today.

I do recommend that you read the article Mr. Hommel cites in his write-up about the town of Cobalt. It is very interesting, filled with good info about that area and the resources. Colorful history, as well. I find it also revealing in other ways that I'll tell you about later.

Later!

CABO ANNOUNCES SECOND $5,000,000 PRIVATE PLACEMENT

Cabo Mining Enterprises Corp. (the "Company") is pleased to announce that it has

entered into an agreement with Research Capital Corp. of Toronto Ontario, with

respect to a brokered private placement of 6,024,097 units at a price of $0.83 per unit to

raise gross proceeds of $5,000,000. The offering, which is subject to TSX Venture

Exchange acceptance, is in addition to the $5 million non-brokered private placement

announced by the Company on February 11, 2004.

Link: http://www.cabo.ca/news/nr04-0217-cabo.pdf

Cabo Mining Corp., it’s last and current JV partner has been doggedly keeping Outcrop’s holding’s in good standing, as well as doing an exploration program on much of the ground. Despite the problems Cabo Mining Corp. had last year when they dropped out of the Telecom business and were halted for over a year, they miraculously managed to keep up with the assessment work requirements on Outcrop ground as well as PrairieC’s holdings in the Cobalt Camp.

Link: http://www.canadianminingnews.com/HeatingUp.htm

Very nice price for placements when the stock was trading at $.57 one day before Mr. Hommel's article on Feb. 9th. Then non-brokered private placement on Feb. 11th at $.75? Brokered private placement on Feb. 17th for $.83?

The November 2003 placement was for $.20 after stock traded @ $.20-.25 for seven days prior to announcement, in volumes over one million on five of those days (following a price of $.15 with volumes that barely made it to 100,000 for months prior, with days interspersed of zero volume).

Interesting transition from failed telecommunications to silver mining and drilling. "I feel it is very important for a company president to be able to correctly anticipate market conditions and to have a plan to take advantage of that." (Hommel on Cabo Mining in article above) Interesting, too, that we get no history of the people in the write-up.

Cabo Mining Enterprises (aka Cabo Ventures Inc., Cabo Exploration Ventures Inc., Cabo Mining Corp....back to 1994 so far) was trading at $.60 in January at the time of a reverse split (1 for 5) to consolidate outstanding shares. Price never went lower than $.53 and was back up to $.57 on Feb. 9th. Many insider transactions (SEDI, issuer #7803) with high volumes of shares between the split and Mr. Hommel's article (and after).

The $10 M placements seemed to put a damper on Cabo today, though. Back down to $1.06 despite silver up significantly and gains or stabilization in most other silvers.

Wish I had a date on the article you cite above, Cosmo. It speaks of "February 2002" as a point in the future, and trading halted from around October 2000 through October 2001, so I must assume it was written late in 2001. I would also like to know what those "environmental" issues are that scared away the likes of Falconbridge and Agnico-Eagle ("wants out at any cost"). If they're trying to dump property, and there is no infrastructure on this vaguely described property, how many years can "exploration" keep a junior going?

Keep nosing around, Cosmo........thanks!

[regli]

I only discovered this board recently and am quite thankful for the well informed and objective discussions on this board.

I am taking part in the private placement for Cabo. I have spoken with Jason Hommel and John Versfelt, the CEO, about some of the issues mentioned here and I am convinced that Cabo is an excellent opportunity from several aspects.

The company has had quite a few difficulties along the way and was able to straighten things out finally last October. The private placement in October really allowed them to pull things together. Hommel became a significant investor even before then and according to him has not sold ANY shares since.

I believe that the company has an excellent business plan. It follows the dual track of on the one hand being a mining company and on the other to develop into a significant player in the Canadian drilling industry at a time when there obviously is a lot of demand for such services, not just in minerals.

From an investor standpoint, this is exactly what I like! We all know about the boom and bust cycles in mining. I much prefer a company direction where not all the eggs are in one basket.

Clearly the company picked an excellent time for its announcements. It is also clear that Jason Hommel has an interest in the company. He does divulge that quite openly. Anybody who reads his weekly communications can see it. I, for one, much appreciate marketing skill and good timing in order to raise capital for a company with excellent potential. It actually increases my confidence in the management, as it shows that they are savy business people and will likely improve my fortunes as a shareholder.

We all have to make our own investment decisions; I made mine and will invest significantly in Cabo!

-------------------------------------------------------------------------

Here just a few responses regarding this thread from Jason Hommel:

RE: (Beware...I've never seen a "sell" review.)
Actually, my method of valuation is quite negative on HL, ABX, and CDE.

RE: He advised selling Farallon a while back. Then got back in.
I bought Farallon, then sold it. The one stock that I bought, sold, and bought, was Avino, which I still have.

RE: In addition, I find it contradictory to state that a reason for diversifying into many silver stocks (which is virtually all Mr. Hommel is recommending) is that the value of the dollar can fall to zero. It will be zero in all the stocks if that happens, so what difference does it make if all my dollars are in one stock? Or, why buy stocks at all?

Clearly, if the dollar goes to zero, stocks will have to be priced in something other than dollars, they will not have zero value, nor will anything else priced in dollars, such as a house, or silver, or gold, or any other asset.

[lhslancers]

In the case of everything going to zero I would prefer the physical especially if this cycle repeats the one of 1979-1980 where the physical ran while the stocks didn't. It was only the secondary top when the stocks took off. I am not crazy about the risk of individual issues. I own a few but the majority is now in physical.

[regli]

I understand your concerns. I think it depends on where in the cycle we are at this point. If we have a derivatives crash, a bond crash, a dollar crash or all of the above in the next few months then your approach is the correct one. I am hedging my bets, as from an investor standpoint there are much higher multiples in the stocks but also, quite obviously, higher risks. Therefore, to give me the highest level of flexibility I have my cash in CEF and the rest in various PM and energy stocks.

I believe that the Fed will do anything and everything to try to prevent a crash, likely this will end up in significant inflation, combined with severe deflation in certain asset categories. Therefore, I think we are much earlier in the cycle than 1979/1980, likely around 1975/1976. In this period mining stocks did much better than the physical metal.

[lhslancers]

I don't think a crash is likely in sm's anytime soon if at all maybe a long grind down. CEF will tank like all the other pm stocks and if that is your concern that is the worst of both worlds as a choice. I like physical silver SSRI PAAS CDE and GSS in that order.

[regli]

I respectfully disagree about CEF. It may go along for a ride in the very short term and even trade at a discount but not very far away from its real value. Just compare its behavior up till now to the combined POG and POS.

It does sell at a 13% premium at this point and in the event of a significant correction, will likely attract even more quick money as it allows for liquid exposure to the metals. At this point, it is the easiest way for Mutual Funds to get exposure and I do not see this changing at least until the U.S. based metal funds will be traded.

Hi regli.........I'm new, too. Thanks for your reply regarding Cabo.

Since you were concerned enough about the comments you read here to talk to Mr. Hommel and Mr. Versfelt, could you enlighten us on the following issues?

1. What was the response to the number of insider transactions clustered around the key dates mentioned above? They were predominantly conducted by Mr. Versfelt and his wife and his other company, American Resources Management Consulting, Inc. (which I am having difficulty finding any information about.......can you tell us more about this company?).

2. What are the environmental issues that cause Falconbridge and Agnico-Eagle to want to dump this property?

3. The only difficulties I could readily find in my research was the failure of the telecommunications venture and the resulting debt that recent private placements have been paying for. I could find no information on the outcomes of a number of mining/exploration ventures that Cabo has been involved in over the years. Cabo has had other properties and ventures, yet there is no mention of other assets by the company or Mr. Hommel, now. What happened to these?

4. Cabo has been issuing press releases about purchasing drilling companies since early 2002 (if not earlier). The deals are still not finalized. Can you tell us why this has taken so long?

Regarding Mr. Hommel's response to comments made in this thread, he could easily have responded to my questions with the same answer as to yours. Instead, he chose to say only, "I won't say." I also do not feel that a short note in his list of "valuations," such as "in debt" for CDE, constitutes a "sell" or even "do not buy" warning, especially in contrast to the long and glowing write-ups he gives to companies which encourage readers to buy. I also find it interesting to see the comments that Mr. Hommel chose to respond to and those that he did not.

I agree that diversification in risky companies is desirable. That is, in fact, why I was interested in Cabo and why I did further research. I have even provided a list of attractive companies in this forum that are more diversified than Cabo hopes to be. But, when research becomes too difficult and there remain many unanswered questions after a certain amount of time has been absorbed in attempting to learn fundamentals that I consider essential to investment decisions, I move on to other opportunities that are more transparent, both in what is revealed by the companies and the analysts that promote them. There are just too many other opportunities for one to remain mired in doubt over a hope for silver and a hope for drilling diversification by a company that offers so little information about its property and its management.

I agree with you on CEF (exchange traded fund of 40% silver and 60% gold bullion, 99% total bullion). It has the highest leverage to gold and silver price than any stock could hope to have, and it will never tank in the same manner as common stock. Price has wobbled only slightly lately because of the offset of declining gold by rising silver (now THAT's hedging! ). Even if the price falls, it will only mean that my fiat currency will be more valuable in terms of what it will buy, and that is my purpose above all.....to protect my wealth, or buying power. The spread between premium and metal price is the only "loss" (depending on your buy-in price) and the premium is reduced as the price falls.

Remember, though, that CEF is a closed fund, so there is a limit on how much "quick money" can enter it on weakness if holders do not liquidate. With institutional buying, the pressure will be even greater if the price of gold and silver rise farther. The metals must be in storage, so if there is a supply problem, the fund is closed regardless of assets (CEF had to wait until the last day for COMEX delivery of silver a few weeks ago!).

I also own GTU.UN, which is all gold and is not a closed fund.

Still, physical is the only guaranteed protection. You cannot get the metals from these ETF's, so there is always some type of risk (it's paper, after all...even a power failure can mean no access to your "money"). I believe that physical is the most liquid...you may have to find a buyer yourself when you need whatever fiat currency is used to buy that loaf of bread (or pay the mortgage?) and hope that buyer has enough of that currency to pay you. Otherwise, get out the physical junk, hop on the mule, and head to town!

Cheers! :burnout:

[SilverStreak]

Jason Hommel has done great things for us silver bugs as he has brought out many new silver stocks of value but he has great power now with the great exposure on many web-sites that he is receiving recognition on.. Just a note that if you are on the wrong side of his recomendation or if you notice that he has sold your stock one week in his silver stocks weekly report then your silver stock is going to do poorly for a few weeks as Jason's opinion has much weight in our silver community...... Power does corrupt but i am not saying that in Jason's case but i have been on the wrong side of his recomendations and it does not feel good as you loose money quickly......
But Jason has made us all money if you are in any of his recos and he has done for the most part well by me as I have a substantial position in CFTN.PK which he is positive on and I am still accumulating this stock for its run to $20 or more and i have done DD on Cabo and do not currently own any of that stock and at this stage probably will look to buy a different silver stock------ This just one persons opinion and it might be a heck of a stock but jason owns over a million shares at his own admission and that turns a red flag on for me as he could have alterior motives----I would like to see some other respected newsletter writer give credence to Cabo

[lhslancers]

SS what time frame are you talking about 20. If it is extremely long term you might just be better off in physical silver as I think it will at least attack the old highs of 50 dollars. I don't want the risk of being in any Hommel recs.

[SilverStreak]

Originally Posted by lhslancers

SS what time frame are you talking about 20. If it is extremely long term you might just be better off in physical silver as I think it will at least attack the old highs of 50 dollars. I don't want the risk of being in any Hommel recs.

In the next 52 weeks for 20 dollars -------- And what do you suppose CFTN will do in price with $50 dollar silver sitting on an estimated 1.2 billion oz of silver and over a million oz. of gold and growing every day as CFTN continues to buy more adjacent land and drill up for reserves with a mill on premises and already permitted.
Cardinal rule #1 is never fall in love with a stock but i surely have a romance going with CFTN

[regli]

Hi redeemed…. I like your thorough approach to investing.

I will try to answer some but not all your questions here. If you would like to delve further into the company, John Versfelt is quite open and willing to talk about his company. He is extremely excited as things for Cabo are really falling into place.

You asked about the environmental issues that caused Falconbridge and Agnico-Eagle to want to dump this property. In fact, Falconbridge never owned this property, they own an adjacent property which makes up part of the old mining ground. 60% of the Cobalt mining camp belongs to Cabo and Cabo owns about 20% of the old mining ground next to Falconbridge. As to Agnico-Eagle, they tried to obtain property in the area but were unable to obtain enough ground to make mining for them feasible. However, they have an aggressive diamond project going under the Sudbury Contact subsidiary on a property that borders Cabo.

According to the company, there are minor environmental issues concerning arsenic. However, the other miners in the area have had the same problems and they can be addressed through new mining technology. The arsenic might reduce recovery but will have very little, if any, impact on the present recovery projections. It should also be noted that Ontario is a mining friendly province with particularly high unemployment in this area.

I will also address the drilling issues. The company has only now been able to secure funding to acquire these drilling companies. In fact, the deals are contingent on the private placement closing as significant commitments regarding working capital were made. But the private placements are BOTH oversubscribed and at this point there should be no reason why the deals should not go through!

The funds obtained will provide the company will a solid base to operate from. I can see from your post that you are a very astute investor. These funds will reduce the investment risk into this company dramatically. I also think that Jason Hommel’s point about dilution is important. Most explorers do not have a revenue stream; therefore all costs have to be covered via either borrowing or issuing stock. The drilling business will help immensely, especially given the recent huge investment inflows into the hands of Canadian explorers.

I think that Cabo’s operating model (i.e. dual track explorer and driller) is especially attractive because the drilling activities can provide multiple benefits not the least of which are joint venture opportunities with other explorers when drilling funds are limited.

I also believe that Hommel’s association with the company is an asset rather than a problem. Even for the best of companies, it takes marketing for the stock to really explode. Witness the incredibly short closings of these placements, clearly made possible by Jason Hommel’s coverage. His significant holdings are also an endorsement for the management and the potential of the company. Look what it means to PAAS and SIL to have high-profile investors. Having good marketing attracts not only many investors but also the right ones.
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I understand that CEF is a closed-end fund. I actually much prefer this structure over a regular mutual fund, again for liquidity reasons but also for their significantly lower expenses. But I also respect your point about the limits on how much "quick money" can enter it on weakness. However, to-date it has worked out great for me and given the multiple objectives, I do not have many alternatives.

I hope this helped a bit.

Hi Regli,

Nice response to a few of the issues. I'll make this one quick, because, honestly, I've made my decision about Cabo and I will wait until it is more firmly entrenched in its objectives before I invest. I would rather pay a higher support price where there is much room for growth than an inflated price (which it is now) based on nothing but hope.

To respond briefly:

I knew that Falconbridge did not own Cabo's property. The article cited by Cosmo above was my reference point, and it was clear in that article that Falconbridge's stake was adjacent. Just as juniors stake adjacent properties to those that have proven reserves, the fact that adjacent properties are considered negative assets by established mining companies is a matter of some concern (indicating further research if one is still interested in the company).

I ALWAYS contact management before I invest (well, not if management is already well-known and has a good track record, which is not the case with Cabo). It is my last point of research, however, because I do not expect the people who want my money to be as candid with me on difficult questions. As explained above, Cabo had so many red flags that it was obvious I would not be getting to the point of calling management. I did, however, feel the need to alert others to some history and filings that might warrent their attention, just as I did with GPXM in this forum (with no responses...an interesting phenomenon).

Regarding Mr. Hommel's promotion of and investment in the company, there is no doubt that his presence has a positive impact on the company's financial goals. But, he is, to my knowledge, the ONLY commentator promoting this company, and I've already been through the reasons that a major investor with his resources and position should be viewed cautiously by the small to average investor. Add the insider transaction record to all of the financial events occurring with this company in the last 9 months (something you chose not to address here), and there are significant questions about the process of financing, price manipulation, personal gain, etc., at least from my perspective. When other reputable analysts (even one would be nice) take a look at Cabo and tell readers their assessment of it, the legitimacy of the investment would be validated (or not). Given the nature of public reviews by analysts and commentators -- generally being only to promote a buy -- the absence of other reputable analsysts on Cabo is revealing. An agreement by large stockholders to not vote or sell shares within a two year period would demonstrate a true committment to this company's long-term success, and I am increasingly looking for that in struggling juniors as a sign of legitimacy before I invest.

Lastly, I own many shares in CEF. I only wished to point out the closed fund aspects of the stock to those here who may not have realized the nature of this stock. I, too, find that a plus, allowing the shares to truly price almost solely to the metals. I had no disagreement with your assessment of CEF! :D

I'm off to other things. Cabo is in my "look at in six months" file, although I track its price daily. My last comment on Cabo and Mr. Hommel, here, is that both should be regarded with many grains of "saltings."

Thanks for your input, Regli.......hope to see you on these boards again!

Redeemed

[TheSimpleton]

I don't know if that info on GPXM was related the thread I started on that. Considering the red flags, the lack of info, and the stalled-to-declining price, I sold it. There are too many good stocks out there with better visibility.

That didn't seem like public business, so I left the thread open for other comments. Besides, who wants to say they made a bad call on a stock and had to sell? Thanks though. I learn all I can, but it's never fast enough.

TS

Your comments on Cabo were quite interesting reading. With respect to your seeking another newsletter writer's opinion of Cabo.

May I refer you to Clive Maund Gold Stocks & Silver Stocks located here.

Unfortunately, Clive needs some money in exchange for his opinion of Cabo.

Good luck. I believe it should be a positive one, or else, why would Clive include it on his website.

I was dithering , after paying for a one month's peek at J Hommel's portfolio percentage placings, on putting about 20% into Cabo. But i had a look at this forum and decided to wait [especially since the price is fairly high].
I expect I share my gratitude with many who have gained caution by reading these well researched posts.
Has anyone read the link provided by the Posse? [I've paid out enough for these newsletters for a while!]?

[regli]

I do not want to belabor the point. However, one thing is for sure, if you look at the cost of drilling this year, the diversification of Cabo has been an excellent business move. As I stated in my earlier posts, it also has tertiary benefits in that it allows Cabo to drill cheaper and also may put it into better JV positions.

After a bit of thought, for anyone who's interested, I changed my mind.
I trust Jason Hommel, and feel ok about it.
I intend to subscibe to the regular view of his portfolio in case he's not in this one for the long term.
During the recent downturn in pm share prices his picks have not fared badly on the whole.