-- Posted Monday, 15 October 2007 | Digg This Article
| Source: GoldSeek.com
Preface
Golden Phoenix is a company with their focus on molybdenum and gold. Their flagship property is the Ashdown Molybdenum Mine in Nevada. Forthcoming straight from their website: “Golden Phoenix Minerals is a mining company publicly traded on the Over-the-Counter Bulletin Board market under the symbol GPXM.OB. The company is based in Sparks, Nevada, and presently all of its mining properties are located within mine-friendly Nevada and Ontario, Canada. Its Ashdown Project LLC, a new molybdenum mine, is in production in Nevada.”
I will tell you in all honesty, that I’ve had more mail, requests, and questions regarding my articles on Golden Phoenix than on any other company I’ve covered. That surprises me. It also tells me two things. GPXM has a great many investors, and that I’m a great writer. OK, Ok, so one out of two isn’t bad. Really, the second reason for all the interest is that GPXM has a tremendous amount of potential. People want to know how that potential is being developed, and of course how they can profit from it.
I haven’t written about the company since April of 2006. But I’ve been watching closely, talking with management on a regular basis, and I believe the company has been moving ahead with their business plan in a methodical “forward looking” fashion. I think the personnel of most junior mining companies are working incredibly hard to create success with their projects. Golden Phoenix is no different with the exception that they have Tangible Evidence to support their efforts.
Before we go further, I’d like to point out that I wrote several articles on GPXM. One titled The Shoot Out at Mineral Ridge (http://news.goldseek.com/StewartArmstrong/1137696660.php) and the other titled The Golden Phoenix Posse - Perceptions, Expectations, and Reality (http://news.goldseek.com/StewartArmstrong/1145977380.php). If you have the opportunity you might review them. If for some reason, you cannot access them, by all means get in touch and I’ll send you copies.
I also want you all to understand that I believe that GPXM has put together one of the best web sites in the junior mining business. This is so important because it makes your due diligence efforts so much easier. You really don’t need me to tell you the ABC’s of this company because it’s all there on their website for the entire world to see. I’ve personally suggested to dozens of other junior mining companies that this is how a junior mining website should be constructed, updated, and operated. Heck, I hope that my site will be as effective!
This web site demonstrates how a company relates to the public so that an audience takes you seriously while simultaneously creating an atmosphere of credibility and trust. Might I suggest another visit to www.golden-phoenix.com if you haven’t been there for a while? The web site, apart from being so comprehensive, (including photos, sequential reports, and project progress) has a personal feel and is easy to follow making it enjoyable to read.
Rob Martin and his staff have created this site so that when you visit, you feel like family. That’s the nature of his personality and it comes through in this vehicle. Rob is now President of the company and he has the positive managerial attributes needed to make a go of it.
Finally, let me point out those Presidents and CEO’s are sales people along with the dozens of other hats they wear. Let no one fool you; these folks should be the best sales people for their companies. Mr. Martin is an excellent salesperson and an even better manager because he knows this company inside and out. He not only knows how to sell the products, he knows how to sell the company. Most importantly, GPXM actually has something to sell: products and in my opinion, most importantly, a vision. Selling products is a short term endeavor; selling a vision takes much more perspicuity and is oriented much more for the longer term. I say this because in actuality, it is my opinion from close observation that GPXM is gearing up for the longer term bigger picture.
We all want a stock that goes from $.30 to $3.00. Could GPXM be preparing the company for that type of growth? If so, it does indeed take vision and sometimes we have to forgo the short term gains for the longer term so called “ten bagger”. There are half dozen companies in our portfolio that fit this profile. It ain’t easy to sit with them as they grow through the curves but the patience certainly can create ample rewards later down the line.
Yes, there have been ups and downs and mistakes are always made; especially when the educational process is an integral part of the growth and corresponding procedures. But this company is where it is today because people with conviction, “smarts”, and drive got a hold of it. Failure simply was not an option. Say what you will, criticize from your couch in your bathrobe, but these guys have learned how to do everything from filling out the paperwork to building the mill to communicating with shareholders and Investment funds alike.
Straight to the Point
Investors have been a bit harsh on Golden Phoenix and the pace of the their progress but then again investors have been a bit harsh on everything over the past 15 months because the Junior Mining Industry has been stuck in a rut even as the price of gold has once again begun moving to higher levels.
What do gold and molybdenum have in common? Something about the nature of gold sets the tone for the rest of the companies in the junior mining sector. Gold going sideways over the past year or so has simply meant that many of the junior mining companies, regardless of your commodity of choice have also been going sideways. “Sideways” tends to make people cranky, critical, and cantankerous. But the old axiom comes to mind when investing: “don’t just do something, stand there!” In other words, exercise patience.
I personally think we have to take a step back and look at the positives of GPXM. They have accomplished a great deal in the last several years. Perhaps they may not have moved and improved as quickly as people would like and perhaps the share price has not appreciated in the ways many people have anticipated; but let’s just say that I haven’t sold my shares.
Please remember this if you take away anything from this article. GPXM is a company in transition. Three years ago this was a company so far in the hole as to not see sunlight and now they are actually beginning to make significant financial inroads for their shareholders and for their JV partner, Win-Eldrich (WEX, TSX Venture Exchange), from their molybdenum property in Ashdown. In their “back pocket”, they have a gold property called Mineral Ridge, also located in Nevada. This is not a grass roots play. Mineral Ridge has had significant amounts of work completed on it over the years, and it is now a question of focusing enough time, energy, and money into the project to get it moving forward once again. With gold well above $700 now, I think it is just a matter of time before we start to see movement on that project. As one who has followed Mineral Ridge for quite some time, I believe we may be pleasantly surprised one of these days. There are still some loose ends at Ashdown being put to bed, but once those tasks have been completed, it would appear to me that all systems are in “go mode” for Mineral Ridge. We also need to consider that running a mine is like running a family: i.e., the work is never done but it can be more rewarding over time!
Several years ago we observed a company that was almost going under and today we have a vibrant company that is making money and has an excellent producing project with others already situated in their portfolio. We see a company that has gone through cycles and is now about to emerge and benefit from all those years of insane work 24/7.
Where Do They Go From Here?
I have a new website that is just about ready to launch and you can find it at www.seacoast-consulting.com/ It should be up and running in a few days from when this piece is posted on www.Goldseek.com. I will be featuring Golden Phoenix much more comprehensively on my site. For now, I just want to let you know that I will be involved with Rob Martin, Dave Caldwell and the gang as they move the company forward.
So where does GPXM go from here? When I last wrote about the company, it really was the old Wild West and the company was in survival mode. Going back retrospectively to that particular time, I think there were some very smart shareholders who recognized how badly the company had been mismanaged yet how valuable its portfolio of properties was. They decided to do something about it and the rest is history as they say.
Again, there are a few factors we all need to constantly reflect upon. Companies go through different life cycles and a static company is a company that is not moving forward—sometimes it is even moving backwards. Along those same lines, in order for a company to move forward it has to acquire the people, the projects, the funding, and the awareness from the public; all the while maintaining a certain element of integrity. It should be the goal of every public company to have the public assist them in getting to the next level. Confidence needs to be established and then maintained with that public if ultimate success is to be achieved.
If the junior markets remain solvent and organized, I personally believe that GPXM will find its way to higher financial levels. Like the guy on “Mad TV” says: “We’s got to get to a hole different lebel!” Those are his words and his phonetics, not mine.
Change
Change is often intangible. Change frequently reflects those intangibles that differentiate the successful companies from the not so successful ones. Golden Phoenix is a company clearly in transition and management has a clear vision of where it wants to go. It is a company that has moved out of survival mode (how are we going to pay this next bill?) to how do we build this company into a world-class entity?( How do we acquire different projects, explore the ones we have, attract the most talented people in the industry, and become listed on more manageable trading platforms?).
Part and parcel of those concepts are the ideas that management must constantly be engaged and that investors must constantly accept not only the engagement, but the risks associated with moving forward.
Additionally, change will occur not only from within the company; it will also change from outside of the company. Markets will change, the cost of commodities will change, the cost of doing business will change, and if a company cannot keep up and adapt to all of the peripheral elements, especially the junior mining companies, they are going to go nowhere fast.
After speaking with Rob Martin and Dave Caldwell along with other people on their staff, I believe that there is sufficient vision to move the company forward. In other words “move along with the program or just move along”. That is transition. It is difficult to implement change because the status quo is so much more comfortable. That is true with countries and it is true with companies.
Embrace (positive) change because it truly is the only constant. This has been the lesson personified by Golden Phoenix.
Production
I believe we also need to consider this. How many times have we heard companies talk about the idea of securing a property and taking it into production? It will take many years for such a program to be implemented given normal conditions. That is to say, taking a project into production doesn’t happen overnight.
To build a company, construct a mill, secure the necessary permits, attract talented people and then to be cash positive all within the course of several years takes vision and hard work. That is exactly what Golden Phoenix has just accomplished. The best evidence is the profit they posted for their Second Quarter of 2007. That profit came from having run the Ashdown mine for only six months. While I don’t expect uniform profits quarter-to-quarter until the mine is fully ramped–up, it is impressive to see this tangible proof of success so early in their operating cycle.
It also means that you’re most likely to step on a few toes along the way because we all don’t march to the same drummer. That’s perfectly normal, even acceptable. Someone needs to make the executive decisions if shareholders are to make a return on their investment. I think those executive decisions have been made on a constant and consistent basis in the board rooms of Golden Phoenix and I think most of them have been made for the good of the company and the shareholders.
Production is ramping up at Ashdown. There is a new General Manager and a new Mine Manager with experience and motivation.
There are people who have their life savings on the line with this company. This isn't the kind of company where people get by standing around the water cooler discussing Monday night football. This is the kind of company where one must be productive or one must take leave. These are the reasons why I think that Golden Phoenix is going to continue to be successful.
Looking forward
As usual I'm running past my time, but I want to mention just a few things. I think most of America is asleep or perhaps a better word might be numb. There's a word called inflation which has now been built into the system and built in the extremis. We cannot forget about gold, and that is why I think the Mineral Ridge property might very well be the next big thing for Golden Phoenix. It is a four-square mile property, 100% owned by GPXM, with $30 million in infrastructure, fully permitted and fully bonded. Its past reserves were in excess of 200,000 ounces of gold, and that resource is being reconfirmed through an updating of their feasibility study. It has a huge exploration potential and a long history of profitable gold production with over 600,000 ounces recovered. I think the folks at GPXM know what they have and I think they will be implementing a program in the not too distant future in order to advance the asset.
I am focusing on gold because I want us all to remember just how ugly inflation can really be. Might I suggest we all try and prepare for it? I’ll have much more to say about this topic on my web site.
I think the United States is in a world of hurt and of course, many of us have seen this coming for quite some time. We've been talking about it. I've been talking about it for three or four years and to see it actually unfolding before our eyes can cause a good deal of trepidation. I know the “boomers” are behind the eight ball in terms of their savings and unfortunately in order to catch up we are going to have to catch the next wave. Allow me repeat that. In order to catch up, we are going to have to catch the next wave. I think the next wave is going to be gold, gold shares, and companies with ounces of gold in the ground. In actuality that wave has already begun but it is certainly not too late to participate. Golden Phoenix is fully aware of the potential and that is one of the reasons why Mineral Ridge is so valuable.
We are going to have to take a few risks. I would like to minimize those risks as much as possible for my own portfolio. Of course, I can guarantee nothing. But there will be information on www.seacoast-consulting.com which might be helpful. I also think that given their track record to date, GPXM has a long and hopefully extremely profitable future ahead of them. Need I say more?
Conclusion
When I first wrote about GPXM it was a completely different company—different in a myriad of ways. We thought that the markets were going to be friendlier, the progress was going to be faster, and the money was going to flow more easily. I don't think the company believed there was going to be as many skeletons falling out of the closet as they eventually discovered. I think some of the key people down in the mine were perhaps a bit overly optimistic. To be a miner, I think you have to be optimistic—almost overly optimistic. It just goes with the territory and such is life in the fast line.
When I first wrote about GPXM several years ago, it was like a company coming out of a bad marriage. Those skeletons were not only falling out of the closet, they were falling out of the desks, the water cooler and even from the different parts of the mine.
It was going to take time to recover and it was going to take time to rebuild the trust with the shareholders. I kept in touch with Rob Martin, who is currently the President and with the CEO, David Caldwell, for all those many months because I always appreciated their goals and their perspectives. I especially connected with Rob Martin and his work ethic. I also kept in touch with a few other key players in the company and I became convinced that they were going to turn the corner and make a success out of this company. I would suggest that they are well on their way.
If there is one thing that I want you to take away from this article, it is this. I believe that GPXM has successfully navigated those first violent storms and choppy waters-- they have been made a successful transition from survival mode to “profitable company mode”. They’ve accomplished this is a very short period of time, relatively speaking vis a vis the junior mining industry. Where they go from here is anyone’s guess, but given where they’ve come from, I have to think it will be a positive experience.
I’ve never quite seen anything like it. Rob and his staff literally built a web site www.golden-phoenix.com which documented the progress of the company on a step by step basis. It was like time lapse photography. We saw the pad of the mill being bulldozed, ponds being created, concrete being poured and we saw the steel girders being erected. Why we even saw Ken Ripley, their previous CEO, up on a ladder with his tool belt on. The motivation behind all of this documentation was to show the world that work was being done—real work and progressive movement on the project.
Transitions don’t take overnight. But what we’ve been witnessing is something that very few junior mining companies pull off. We’ve seen a company being built, reconstructed, and developed right before our very eyes. We’ve seen a company that had nothing with which to begin (except a load of debt) and create something out of virtually nothing. And it has really been done in record time, all things considered. People bemoan the costs—but how do you build a company and mine minerals without expenses? I don’t see a lot of fluff in their statements?
The posse has turned into a bona fide group of knowledgeable businessmen. Yes, it has been a rocky road and there have been bumps and bruises along the way. But they are now a molybdenum producing company with cash flow in the millions of dollars.
In many ways this is nothing short of a miracle considering what they had to work with. I have to bring it back to Ken Ripley for just a second because he was a guy who was supposed to come in for a few months to help the company get back on track. He stayed for two years, away from his family, and literally helped build the infrastructure with his bare hands. I remember talking with the guys over the years and at some points they were working all day and coming home to the comforts of an un-insulated trailer in the middle of a cold windy Nevada winter. What fun!
Rob Martin eventually had to move from Hawaii to Nevada and endured the same kind of hardships for a year or so until he finally got settled into some reasonable digs. David Caldwell literally drove his truck into the ground making the trip from his home in Elko to Reno and back. Ladies and gentlemen, that's what I call dedication. When you live it, read it, build it, and even finance it, you know it. These people know molybdenum and “moly” is going to be a very valuable asset for countries developing their infrastructure. Gold is next and that is going to be some awesome combination -”Moly” and gold.
The point is simply that the Posse made some serious sacrifices. I am willing to back any group of guys who would endure these kinds of ordeals. I don't know if I could have done it myself. And if the truth be told, if these guys really knew what they were getting into at the beginning, way back when, I'm not sure if even they would have undertaken to build this company. But they did and I personally think that the best is yet to come.
I could have quoted facts and figures and how much money Golden Phoenix is and will be making. But really, that hasn’t been the story. It may soon be; but for now, this is the story of men against the elements, of men rediscovering themselves, and of the will of those men to begin with less than nothing and build something for themselves, their shareholders, and the future. That, my friends, is the real story.
You’ll find me holding on and looking forward to working with this group over the next several years.
See you soon at www.seacoast-consulting.com, Gold, Commodities, and Common Sense.
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Until next time,
D. Stewart Armstrong
consulting@seacoastpub.com
www.seacoast-consulting.com
Gold, Commodities and Common Sense
Disclosure and Disclaimer by the Author: In the spirit of full disclosure, although D. Stewart Armstrong, Seacoast Consulting, and or Seacoast Publishing, are independent entities, they may be employed by this particular company, may own shares in this company, and this company may be an advertiser on GoldSeeek.com which is an internet site in which the author is consistently involved. Although the author is an independent analyst, he is also a paid consultant by the Junior Mining and Exploration Sector. The author is a private investor in the precious metals markets. He is not a board qualified or licensed investment advisor. All material is deemed to be accurate and to have been gleaned from reliable sources in a timely fashion; but said material cannot be construed as being totally complete or absolute. Consequently, the aforementioned parties can take no responsibility for any investment decisions you make or the results thereof. The author does not accept responsibility for any possible errors in calculations disseminated by any company he represents or in which he is involved, nor does he guarantee or insinuate any type of investment results. Consider any and all recommendations as personal opinions on the part of the author. It is highly recommended, and even insisted by the author, that investors, individuals, and all interested parties, conduct their own due diligence before becoming involved in any investment or with the interests of any company mentioned. That process would include direct contact with the company to confirm any facts, opinions, or ideas represented by these companies in general or on any Company CD’s distributed and referred to in these articles. The author would suggest the possibility of hiring professional advice from a certified investment advisor before making any investment transactions. Again, please consider these articles as opinions and please understand that investing in Junior Mining Companies is a high-risk, high reward proposition and you must take full responsibility for your own actions because there is always the possibility of losing all or a portion of your investment capital. This disclaimer applies to this article, Email correspondences, and all communications with both public and private entities. This disclaimer is applicable to all articles and communications published previously and to ones to be published in the future.
-- Posted Monday, 15 October 2007 | Digg This Article | Source: GoldSeek.com
