CymorFund Stock Picks Buy Scorpio (SPM) Updated from Feb 8/13

Scorpio Will Have its Day – It is a BARGAIN
On February 8, 2013, we recommended buying Scorpio Mining Corporation (SPM) @ $0.95.  We thought it excellent value then. We still think it has excellent value. Continue holding this stock.

 

SPM Stock Chart May 2013

 

 

What we didn’t know in February, is that every junior mining stock would get killed in March and April 2013. There has been relentless downward pressure on every stock in the resource sector, with the senior’s losing 30-50% of their value, and the juniors losing 50-80% of their value. It has been the worst meltdown in memory – aside from the world meltdown of 2008.

CymorStockPicks have stood up very well in this carnage, and are ahead.

Scorpio Mining has been our worst performer. This has been because the market for all junior resource stocks has been heavily falling. Scorpio continues with good news and as production continues to improve and increase, and as the price of silver is now stabilized with upward pressure, now is the time to continue to hold Scorpio in your portfolio.

Scorpio Update
We recommended Scorpio at $0.95 and it has lost 50% of its value, closing today at $0.475. It has been our worst performer. But keep the faith.

  • On Yahoo Finance, the 1 year estimated target remains at $1.78
  • While research reports are negative on the sector, the latest reports on SPM are ‘BUY’ with a $1.60-$1.75 target, and several analysts reiterating their targets
  • New press release updating new mineral reserve estimate for the Nuestra Señora deposit and Preliminary Economic Assessment (“PEA”) for the Nuestra Señora, El Cajón and San Rafael deposits

This is a very positive update and increases the deposits, gives a very nice cash flow, and increases estimated production significantly. Remember that the stock market swings according to sentiment, and rarely based on value. Whatever direction it is moving in, it vastly overshoots the mark, and then often corrects by overshooting the mark in the opposite direction.

Real money is made by those who realize this fact and who buy when doom and gloom pervades. Scorpio remains a good value.

Key Values

  • Scorpio is financing expansion from its own cash flow. It has no debt.
  • Gold and silver market values have established a base, with slightly stronger market values
  • Production for the year 2012 was 2.8 million silver equivalent ounces
  • Potential to increase production this year by 80%
  • Excellent additional prospective properties owned by the company.

 

 

We may or may not have positions in securities we name. In making an investment decision consider numerous factors such as portfolio balancing, timing, cash and capital reserves, asset allocation and other. Do your own research. Matters discussed contain forward-looking statements that are subject to risks and uncertainties and actual results may differ materially from any future results, performance or achievements expressed or implied.

Views expressed are opinions and not investment advice. You should retain a licensed professional to guide you and  not rely on the opinions expressed herein. This report is neither a solicitation nor a recommendation to buy or sell securities. We are not a registered investment advisor nor a broker-dealer. The information contained herein is based on sources which we believe reliable but is not guaranteed as being accurate or a complete statement or summary of the available data.

 

By Larry Cyna

Mr. Cyna is an accomplished investor in the Canadian public markets for over 20 years, and has managed significant portfolios. He is a financing specialist for private and public companies, and has expertise in real estate and debt obligations. He has assisted private companies accessing the public markets, has been a founding director of public companies and continues as a strategic consultant to selected clientele. He is and has been a director, a senior officer and on the Advisory Board of a number of TSX and TSXV public companies in the mining, resource, technology and telecommunications sectors, and the Founding Director of two CPC’s with qualifying transactions in mining and minerals. He was an honorary director of the Rotman School of Management MBA IMC program, has completed the Canadian Securities Institute Canadian Securities Course & Institute Conduct and Practices Handbook Course, was a former Manager under contract to an Investment Manager at BMO Nesbitt Burns, a roster mediator under the Ontario Mandatory Mediation Program, Toronto, a member of the Institute of Corporate Directors of Ontario, a member of the Upper Canada Dispute Resolution Group, and the Ontario Bar Association, Alternate Dispute Resolution section. He obtained his designation as a Chartered Accountant in Ontario in 1971 and was the recipient of the Founder’s Prize for academic achievement together with a cash reward. He became a CPA in the State of Illinois, USA in 1999 under IQEX with a grade of 92%. He is a Member of the Institute of Chartered Accountants of Ontario and the Canadian Institute of Chartered Accountants. He holds certificates in Advanced ADR & in Civil Justice in Ontario, Faculty of Law, University of Windsor, certificate in Dispute Resolution from the Ontario Institute of Chartered Accountants. Previous accomplishments are Manager of Cymor Risk Consultants LP specializing in Risk Management Assessment; CEO of Cyna & Associates specializing in mediation and ADR; Founder & Senior Partner of Cyna & Co, Chartered Accountants, a fully licensed and accredited public accountancy firm with international affiliations; and was a partner in a large public accountancy firm. Mr. Cyna is well known in the Canadian Investing community. He is invited to, and attends presentations given by public companies usually 3 or 4 times each week. These presentations are intended by the various hosting companies to present their inside story to sophisticated parties and Investment Managers for the purpose of attracting funding, or of making parties more interested in acquiring shares of those companies. Being a part of this keeps Mr. Cyna deeply involved in the current market and leads to numerous investment opportunities.