Chaparral mining is a spin-off of International Minerals after that company was taken over. I purchased shares before the spin, as I discussed here. That article includes an attempt at valuing the company's mineral assets, which is something I'm generally uncomfortable with. However, the company has begun trading at $0.32, below the approximately $0.48 in net cash and current assets the company indicated they will have on their balance sheet. At 66% of NCAV, this is a Benjamin Graham net-net type stock. If the mining assets turn out to have any value or the price of gold increases, there is additional upside past $0.48. Basically, I just look at this as a chance to not lose money with potential upside past the cash value.
Disclosure: Long CHL
Disclaimer: The content contained in this blog represents only the opinions of its author. I may hold long or short positions in securities mentioned in the blog, and no updates to the disclosure above will be made. I may buy or sell securities at any time. In no way should anything on this website be considered investment advice and should never be relied on in making an investment decision. Read that last line again. Also, this blog is not a solicitation of business. The content herein is intended solely for the entertainment of the reader and the author
No comments:
Post a Comment