Temex Resources (CVE:TME)

I've had TME on one of my watchlists for about 8 months but I haven't really looked into it in detail before. After hearing some other people mentioning it I decided to look through their website and I am realy impressed. Everything I see shows excellent value and potential and I think the company is way undervalued at the moment. This doesn't mean book value! I believe there is high potential because 1) they have a partenership with Goldcorp, so there is no worry about financing with their primary property, 2) they have three additional high potential properties that have excellent proven resources and are fully owned, 3) they have an ongoing drill program which, considering locations and existing resources in those areas, will quite likely continue to produce good results, 4) they are already located in a major mining camp, and won't have to develop all the infrastructure because of their partenership with Goldcorp, 5) approximately 105 million shares.

I get the impression something big is in the making because of: 1) their drill program to extend their resources, 2) their plan to expand their NI 43-101 resource estimate, 3) partenership with Goldcorp, and 4) proximity to existing mill and other infrastructure. It's quite like Trelawney in that they even have existing underground workings and facilities, except they don't have the overhead costs. I will be freeing up some cash and will put some into TME shortly. Hopefully the timing will work out and I can get it at the current low share price or better. If they announce a plan to re-start a mine, this will do the same thing as TRR, and if that kind of announcement comes out, I surely will not be selling early this time.

Anyone care to give their analysis?
Fred

This is one of your more detailed analysis to date, and I have nothing much to add from the financial side. Not too far off from book value and lots of cash on hand, although I think that is earmarked for spending already.

They pretty much promised further dilution to provide funding in the notes to the financial statements, but that is expected.

There was a note about the reason for a lot of companies continuing to expand their drilling program is to maintain the status of flow through shares (To be honest, I really don't know all that much about this).

With the complete lack of debt and cash levels well in excess of liabilities, there is not much risk at the moment.

Those same points jumped out at me when I read through their website, but they kind of go with the type of company they are currently in (i.e. exploration). However this can really only take them so far. What they need to to develop a source of income (i.e. a producing mine), after which they can focus more on their other properties. If this was the case, they could really turn themselves into an intermediate mining company in only a few years time. I'm hoping to start a position around the current price of 0.30-0.35.

I made a starting position at 0.34 and although it dropped from there, I feel I am in decent shape and waiting for results. I will likely sell 2/3 of my shares on a pop, depending on the news and let the rest ride. In my opinion there is just something here that I'm not seeing. They have some really incredible properties, but the only things I really see coming down the pipe immediately are drill results. Everything else is either one, two or three quarters away, or a surprise. That advise on patients is crap when you're nervous.

I was talking to a guy who knows a guy who knows some stuff and he is also looking at Temex. I was trying to get some info on DOR which he has a pile of shares in and he moved the conversation in the direction of Temex. I actually logged on today just to get some input on it.

So thank you for reading my mind and preparing the analysis before I got here.

Well, I wish I could tell you whats going on, but I would first like to know myself so that I could decide whether to sell or hold. I'm up 20% and trying to decide which of my two "know it all" strategies/advise to listen to: Sell and take the profit or hold and wait for more. Damn greed... gets me every time!

The two things I see in the very near future (10 days) are 1) results from their drilling operations which are expected out any time now, and 2) maybe something of potential additional interest at the conference in New York on May 10th. Maybe some news has leaked... either way, I like the volume.

Hey, Great job Fred! I would say hold if you think the drill result may be promising (possibly based on previous releases or historical data?).

Or sell and take your 20% and be happy (I have yet to be successful at this myself though).

Either way, it is nice to be up that much. It gives you a little more breathing room to hold long through the little dips along the way.

hmmmm, I guess I wasn't much help here at all

I sold mine earlier this morning (up about 9% on average over 7 days average holding time) when the price was around $0.36. If only I had waited....

Based on my estimate of book value (quick estimate based on financials and not based on resources) and the outstanding threat of dilution, I figured the stock was getting too expensive for me.

Not a lot has changed with TME over the summer, but I see it having potential as both a short term and long term play. This fall they will have an updated reserve estimate and there are many pending drill results from multiple properties for both silver and gold. I think it will jump up and down over the next 3 to 12 months based on results. The only long term potential will be the start up of a mine. This is most likely to happen for their gold developments first as they have a 40% partnership with Goldcorp to assist in financing/milling the ore.

I will trade 50% of my holdings on peaks and troughs and hold the remaining 50% for potential developments which would create a source of income.

No new discussion here on?? Since freds email? May take a position... Looking into more tonight, know of new development public or better yet not public?

This is just re-stating what I had written in my email for those who were not part of it.

•About 2 million ounces measured between 2 properties (Juby is along the same strike as Trelawney, Whitney is next door to Gold Corp). Obviously more ounces in the indicated and inferred categories waiting to be proven. Aiming to have near 5 million ounces within a year.
•Open along strike and at depth. Ongoing drilling and resource estimates on both properties
•Whitney property - Multiple high grade intercepts but sporadic – mixed with lower grade making it open pitable. Same as past production in area.
•Goldcorp has an underutilized mill very nearby, 40/60 joint venture with Goldcorp on Whitney property
•Joint venture requires Temex to spend $5M on properties – complete with compliant resource estimates
•Silver property in Gogama likely to remain inactive
•7 million warrants and options outstanding. 1.3 million warrants expire Oct 12th at .26.
•Greg Gibson as chairman of the board (former CEO of Trelawney)

Here's a link to a BNN show about them:
http://watch.bnn.ca/market-call/september-2012/market-call-september-28-2012/#clip772045

Re: News - Tuesday, October 23, 2012

http://www.temexcorp.com/i/pdf/nr/2012-10-23_NR.pdf

Sorry, been busy with Wedding and Honeymoon, didn't have much of a chance to look at the site.

Still don't really have much to say on Temex that you haven't said already, or I haven't said before. Its a little risky in this stage of the economic cycle, but gold in general could be a very good place to be.

The whole "fiscal cliff" (need to stop increasing and start decreasing the deficit) as well as approaching the "debt ceiling" (maximum legal limit on US debt) for the 3rd time I think is really going to be pretty bad for the outlook in US. However, I think if you look around the world, it is possible that just about every other country is in the same boat, and maybe things will equal out after all even if that means we all fall down together.

I'm not concerned about the fiscal cliff on this play. It's gold... nuff said.

To add to my analysis given a month ago:
- $10 million in cash
- 35,000 meter fully finance drill program
- 25,000 meters focused drill program on the Whitney property whivh includes:
- infill drilling on upper Halnor to increase measured and indicated reserves
- expansion drilling to the west (Q-zone) to add measured and indicated reserves where deposit is open
- further exploration drilling to expand resources on high grade C-Zone
- further exploration drilling to expand resources on highest grade Broulan Reef
- See link for perspective - http://www.temexcorp.com/s/tgp_maps_and_photos.asp
- significantly expanded land aquisition on Juby property which includes:
- Added resources which were part of JV agreements with Goldeye (now 100% owned) (~40K oz measured and indicated and 56K oz inferred)
- added drill targets on both ends of the Juby main zone strike where resources are open in both directions
- added very high grade intercepts at Hydro Creek
- added very high grade intercepts at Dome
- fully funded 10,000 meter drill program initiated
- see link for perspective - http://www.temexcorp.com/s/jgp_maps_and_photos.asp
- I'm not sure what the drill targets are on Juby
- Romour has it that management is going to Europe to look for investors. This is significant because Gibson did this exact move with Trelawney and made them millions. He knows exactly who to go to and what to tell them.

If I were management and wanted to get this thing off the ground, I would have done exactly what they've done so far. I can't think of anything else in the short term to get this moving. Now they need results. They did dilute fairly significantly with all the financing and property aquisition, but not to the point where I'm concerned... thats the price of financing. As far as timelines go, I see an 30-50% increase in the near term (4 months) and big action in 10-14months. Two year max timeframe to buy-out. All IMHO