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suzuka can you explain a bit more? I don't really understand.. I just looked up the google boards and saw that OPC was sold for 0.12 per share(?).. what was the market value of it per share before hitting that low?

Quote:

Originally Posted by SiRV (Post 7721110)

He cannot explain it in the detail that I can, I'm not going to touch on the "questionable" financial statements and what is leading up to a possible civil lawsuit, but here is the story OPC. (Lots of people questioning the last 6 months OPC was functional and denied being in hot water...)

Back when Opti/Nexen Joint Venture started up, it was basically this: Opti/Nexen would split CPF/Pads (production) 50/50, and Opti was to have 100% ownership of an upgrader on the Long Lake site.

There is two major problems that came to be;

First of all, production, they have never had "lots of production", it was deisgned for 72k barrels per day, and has averaged to this day 20k per day.

Second major issue, Opti has 100% interest in an "orcrude" upgrader designed for 58k barrels per day, trouble is they have been working the bugs out of this facility for YEARS... it did not start producing until the last year and it has yet to break 18k BPD... where do the 18k BPD of bitumen come from? Approx 50% is from the shared interest with Nexen, and 50% is outsourced from other producers.

This is the first complication, finger pointing from Opti at Nexen, they want all of Nexen's produced bitumen to be processed through their upgrader, Nexen does not have any interest in this arrangement and as such they provide 35% of production to Opti and thats it (it was 50% initially but 15% was sold back to Nexen to help relieve heavy debt load) Meanwhile Nexen is barely able to get 50% of target production (after nearly 4 years since first oil!!), and this of course frustrates Opti even further, but the way the contract is inked, operational duties belong to Nexen, period. Reason for poor production, SAGD in these formations has been VERY hit and miss, there is a good chance that the Long Lake Lease is just not the best formation for this type of extraction with current technology, they have also had a never ending to-do list from day one (construction and commisioning), they took an extra two years to have that plant fully commisioned.

Then there is the "orcrude" gig, this is Opti's unique process to upgrade the bitumen, the pilot project pre-04 was great but thats is where the good news ended. This upgrading facility was delayed 2 years, mainly due to commisioning issues, and went online in 2009, from that day it has been nothing but shut downs and repairs. The problem is the gassification unit, short of giving everyone here a 30 minute speech about how it "doesn't" work, here is how it is supposed to work:

"The Long Lake Project uses a Shell-licensed gasification system with four 1033
tonne/day (each) gasification reactor trains, each with dedicated syngas coolers
generating 7700 kPa(a) steam. The steam from the syngas coolers provides steam for the
operation of other process units, along with steam from other sources.
Cooled syngas from all four gasification units is combined and treated in a single UOPlicensed
Selexol™ gas purification system. After treatment, most of the syngas is
directed to a Linde PSA unit for recovery of hydrogen. The Upgrader’s hydrogen
requirements are lower than the quantity of native hydrogen in the syngas, therefore no
CO-shift is required. The tail gas from the PSA flows directly to users (primarily steam
generators) without compression. Since no CO-shift is employed, the tail gas has low
CO2 concentrations and thus a BTU/scf content that is approximately the same as
unshifted syngas.
The Long Lake Project also incorporates two General Electric (GE) 7EA gas turbine
generators in a cogeneration system. The gas turbines will operate on syngas (high
pressure syngas, compressed PSA tail gas, or mixtures of both), natural gas, and mixtures
of syngas and natural gas. NOx suppression is provided by steam injection.
The gasification system will normally operate with all four gasifiers running at less than
100% capacity, with the feed rate following the asphaltene production rate from the
bitumen being upgraded in the OrCrude unit. During periods when one of the
gasification reactors is out of service, such as for burner maintenance, the remaining
reactors will increase throughput to their maximum capacity. The syngas from the
operating gasifiers will be directed to the PSA unit, which will be able to recover
sufficient hydrogen to meet the hydrocracker requirements.
A key advantage of the Long Lake Integrated Upgrader is that the proprietary OrCrude
process accomplishes the carbon rejection step by producing a liquid asphaltene stream.
This feedstock allows use of a liquid-feed gasifier design, which offers large capital cost
advantage over solid-fuel gasification configurations. In addition, the integration with
the SAGD operations, the selected severity of hydrocracking, and the amount of
cogeneration, all support a material and energy balance that avoids the expense of syngas
shifting, CO2 removal, or significant PSA tail gas compression."

The short version of why is doesn't work, the required temperature transformation that this unit is designed to achieve, is not possible due to numerous major design faults.

So basically you have a company that hasn't even met 25% of the expected bitumen yield, an upgrader 2 years delayed, that has maxed out at 31% of expected production, and they are forced to buy oil from other sources to prevent that number from being in the mid teens.. and thats when the facility is operational, could they buy more oil from another producer to increase capacity at the upgrader ...? Yes, but the upgrader can't handle any more thats why it's only getting 18k BPD.

I'm off to bed, I have been laughing at the people that compare anything to OPC, they will always be looked at as the first major oilsands project in Alberta to fail.

FYI, I was involved in the construction of this project, and a good friend was the direct construction manager for the gassification unit of the project.

If you do your own homework, you will see that I am giving the sunny side up lol

I'm a long position for anything related to Lease Land in Alberta Oil sands... but not OPC, since 2008 the writing has been on the wall for Opti.

On a side note, AOS is getting more attention lately, I have lots of homework left to do on this one.. but at a glance it looks like a solid buy right now. (firesale prices)

Edit: To add insult to injury, 2009 financial collapse and oil prices taken a beating didn't help, they also built this facility during the peak of the boom, they paid top dollar for the worst materials, engineering, and construction. I consider this a major factor.. but hard to quantify.

my mind draws a blank whenever people tell me about oil in Alberta.

A few of my client companies would start private oil companies and once they had oil production, they would sell it to a oil income trust. Wash and repeat a few times.

I do like XOP - Canadian Overseas Petroleum Corp.

Interesting articles on Chinese companies since Suzuka84 was mentioning about some.

Smear campaign sends Silvercorp on roller-coaster ride

Quote:

At 6 a.m. on Sept. 2, Silvercorp Metals chairman and chief executive Rui Feng was taking a shower in his Beijing hotel room when the phone rang.

It was from company director Paul Simpson, calling from Silvercorp's Vancouver head office. The message was short.

"Rui, you got what you were waiting for," said Simpson.

What Feng had been waiting for was an attack on Silvercorp by short sellers, stock traders who make their money by selling borrowed stock in anticipation of buying it back at a lower price. As a Canadian company with operations in China, he knew Silvercorp was vulnerable and a large institutional investor had warned him only two weeks earlier that somebody had been "shopping" a negative report on the company.

Now, an anonymous letter and equally anonymous report delivered to Silvercorp's auditors in a brown manila envelope declared the report had been released to news media accusing Silvercorp of a $1.3-billion accounting fraud. It was a flagrant bid to drive the stock price down. A copy had also been sent to the Ontario Securities Commission. After receiving the phone call, Feng hung up, in shock.

"Finally the day was here," Feng said in an interview in the boardroom of Silvercorp's downtown Vancouver offices. "This thing could destroy our company. People can get excited, they can panic."

Silvercorp had been caught in the vortex of a storm that has battered dozens of companies with China links, and in some cases destroyed them: short sellers using Internet forums to publish allegations of fraud against transnational companies.

The attacks are on corporations with operations in China, headquarters in North America and with shares listed on North American stock exchanges. Some of the reports have been based on fact.

When they came on the North American scene several years ago, these new companies were enthusiastically accepted by investors seeking a way to take part in the expanding Chinese economy. But when the U.S. Securities and Exchange Commission launched a broad fraud investigation in December 2010 against some of them, investors became justifiably nervous.

Short sellers, who usually deal in penny stocks, saw opportunity in this environment of nervousness and began writing their own research reports purporting to have uncovered even more instances of fraud. Internet blogs and forums made it easy to disseminate their reports. Feng had followed the most spectacular case - the collapse last June of Sino-Forest Corporation, a Mississauga, Ont.-based company with operations in China. It was felled by the year-old U.S. stock research website Muddy Waters Research, run by short seller Carson Block. Sino-Forest shares dropped from $25 to $4.80 before trading was halted.

John Woods, founder of the equities newsletter Stockwatch, said the China-focused short sellers with their reports are the reverse of the classic "pumpand-dump" promoters who promote a stock to manufacture a share price increase and then dump their own shares. By the time regulators track them down, often the damage has already been done.

"This year's short-selling star is probably not the short-selling star of three years ago, nor of three years hence. But when you have someone like Carson Block with his Sino-Forest call, which appears to be rather clever so far, it lends credibility to all short sellers," Woods said in an interview.

"Short sellers take a large position based on their research and then they publicize it. They can have spectacular wins, which is what Carson Block had with Sino-Forest, then you get all sorts who would like to look the same and reap some of the same style rewards. They are a curse."

AGGRESSIVE RESPONSE

The letter took Feng back to the days of the Chinese cultural revolution, when, for the cost of a four-penny stamp, an anonymous letter writer could destroy a person simply by mailing a letter to revolutionary authorities accusing him of disloyalty.

"One day you are a great leader; the next day you are in a labour camp."

He knew Silvercorp had to fight back and fight back immediately.

That morning, he went to Silvercorp's Beijing office and coordinated the company's defence with staff there and with eight Silvercorp executives and staff in the Vancouver office, where it was still Sept. 1 and the work day was just ending. It was the beginning of a campaign to get information out to shareholders.

They worked through the night, rebutting the allegations and compiling everything they could - from bank statements to tax receipts - to prove that the company was not a fraud. They set up a link on the company's website headed Short and Distort. The board of directors set up an independent committee to investigate the allegations, hiring forensic accountants KPMG to go through the company's books. The KPMG audit report was released Oct. 24, clearing the company of the allegations. But on Sept. 2, Feng could not help but think how tenuous a business' existence can be.

14% OF SHARES SHORTED

Feng wanted Silvercorp to be completely transparent. He knew the company was not a fraud. There was cash in the bank and it was paying a dividend. It had a market capitalization of more than $1.5 billion, was debt-free, and had posted a net profit of $68.8 million in 2010. It trades under the symbol SVM on both the TSX and New York stock exchanges.

By 3 a.m. Vancouver time, 12 hours after the accusation had been received, the company's response was ready to be released. Silvercorp issued a news release in its defence, complete with bank statements, on Sept. 3.

"It took some time to figure out how to do it. At that time, our data didn't matter any more, because according to this accusation, anything we put out was a fraud. So we had to use third-party information to support us," Feng said.

Fourteen per cent of the company's 171 million outstanding shares - 24.5 million shares - had been shorted. The magnitude of the number of shares out on loan - worth $220 million - led Feng to believe this was not just one or two individuals but a hedge fund worth billions that was behind the attack. There had been a long buildup to the fraud allegation. It began shortly after the Sino-Forest scandal, which broke in early June. Within days, other Chinese companies were being targeted.

"I was watching it. I was nervous something would happen to our company," Feng said.

The first indication came June 3, a day after the Sino-Forest scandal broke, when a news alert appeared on Reuters.com saying Silvercorp was going to miss its quarterly revenue forecast. It was posted automatically to Reuters.com, a raw press release unedited by Reuters, one of hundreds of such releases that the Reuters site publishes as a business service, and it was wrong. It could have originated from wire feeds, a publicist's office, a company from virtually any source, making it difficult to track down. Reuters withdrew the alert after Silvercorp contacted the news service to explain it was false. When the quarterly results were released, Silvercorp showed a 94-percent increase in revenues.

"Somebody was playing the market already by issuing false information," Feng said. "So we started preparing, maybe something will happen to us, but we were a bit naive, we didn't give it too much attention."

Feng, who lives in West Vancouver with his wife and two children, graduated as a geologist at Wuhan University in China and came to Canada in 1988, finishing his schooling at the University of Saskatchewan, where he received his PhD. He specializes in evaluating and acquiring mineral properties in China, and has founded several companies, including Global Pacific Minerals, which was sold to international financier Robert Friedland. Feng founded Silvercorp in 2003, by taking over a junior mining exploration company trading on the Venture exchange. He holds 3.99 million of the 170.5 million shares outstanding in Silvercorp.

Silvercorp stock had closed the day before at $8.56 on Toronto's TSX. On Sept. 2, it started to fall while the volume of shares being traded climbed. Feng was one of the buyers, putting his own money behind his belief in the company. On Sept. 7, he bought 100,000 shares on the New York Stock Exchange, paying $787,000 US. A week later, he bought another 135,000 shares on the Toronto's TSX exchange for $927,900. The stock sputtered upward briefly but when the B.C. Securities Commission announced an investigation Sept. 12 and a second anonymous report was posted on the Internet Sept. 13, Silvercorp plunged to $5.86 - a 31-per-cent drop that wiped out more than $400 million in equity. Feng estimates that the short sellers made more than $50 million. In those two days alone, 20 per cent of the company's shares traded hands. By the end of the trading day on Sept. 13, the stock rallied to close at $6.20 on the TSX. It has not touched those lows again and volumes traded have returned to normal levels.

But on the morning of Sept. 2, Feng was uncertain what the future might hold. The short sellers' report was the first of a number of reports attacking the company posted on the Internet by at least two separate groups.

On the website ChinaStock-Watch.com, the group that sent the letter identified themselves as "investors who have successfully identified accounting issues related to public entities with operations in China in the past." They said they were remaining anonymous because they did not want to receive any personal threats and they indicated they were not the only group posting reports on Silvercorp.

ADDITIONAL ALLEGATIONS

Those other reports appeared on the website Alfredlittle. com, a forum focusing on Chinese companies listed on North American markets. It solicits reports from anyone, providing the allegations are backed up with documents, and promises readers an investment return of at least 30 per cent.

Silvercorp shares continued to slide during those early September days, despite the efforts of the company to post documents countering the allegations on its own website. On Sept. 12, the B.C. Securities Commission announced it had initiated an investigation of the matter.

Then on Sept. 13, while Feng and other company executives were on a road trip talking to Eastern investors, more allegations were posted on Alfredlittle.com.

The short sellers' timing was perfect. Silvercorp corporate secretary Lorne Waldman was in the middle of a presentation at a New York conference when the allegations were posted. This time it was about alleged wrongdoings by Chinese subsidiary companies. It also claimed the group had conducted an independent assay of Silvercorp ore that showed low silver content. Waldman was peppered with questions from the audience that he couldn't immediately answer.

Feng immediately returned to Vancouver, spending three hours of the flight on the telephone crafting the company's response. This time, the language used in the attack was not as strong. It used the word "questionable," rather than "fraud." Silvercorp released revenue tax certifications, bank statements and a reconciliation of production and grades.

The ore samples the group had collected, it turned out, had been picked up from the side of the road, after falling off ore trucks leaving a Silvercorp mine. Feng knew such a method could not possibly gauge the quality of a resource, but would investors know? Stockwatch's Woods said it is absurd that somebody could pick up samples from the side of the road and draw any sort of conclusion from it. But the farther away from the head office such activity occurs, the more difficult it is for regulators to track information down and investigate, he said.

That day, shares in Silvercorp hit a 12-month low - $5.86 on the TSX.

The posts continued throughout September, with fresh allegations, now aimed at subsidiaries of Silvercorp following each rebuttal. The last post on Alfredlittle.com was Sept 22. It was considerably tamer in tone, dealing only with the ore samples it had collected from roadside locations, and concluded with: "Alfredlittle.com is in communication with investigators from both the British Columbia Securities Commission and the Royal Canadian Mounted Police to answer their questions and to help them sort through the issues."

In an email to The Vancouver Sun, Alfredlittle managing editor Simon Moore defended the research reports, saying that each post is backed up by documentation. Silvercorp has launched a lawsuit naming Moore and the website, which, Moore said, has had a chilling effect.

"We strongly believe [Alfredlittle.com] is a great service that should never be silenced or dismissed by critics such as Silvercorp."

Moore said seven Chinese researchers and analysts working in China prepared the reports he published.

"I do not know the real identities of the researchers nor the contributors who submitted the report. It is not that our contributors want to remain anonymous. They have to remain anonymous," Moore wrote. "They are afraid of getting physically harmed in China as the threat[s] in the recent past have proven to be very real."

He claimed Silvercorp has so far only selectively addressed concerns raised on Alfredlittle.com. The KPMG report addressed only the initial research that was published on ChinaStockWatch, he said. Moore said he does not know the other group who posted on ChinaStockWatch and has no affiliation with ChinaStockWatch.

SHARES STILL STRUGGLING

Up until the end of the Sept. 30 quarter, Silvercorp had spent $2.5 million fighting the fraud, but Silvercorp shares have yet to recover. Shares are trading now in the $7.50 range.

Feng said as a result of shortseller attacks, Chinese businesses are having second thoughts about investing in North American exchanges. He noted that one company, Harbin Electricity Ltd., has already done that by going private. After falling from the $20 a share level to $5.82, the former owner, who took it public in the first place, bought it back in late October for $24 a share.

"It's hurting both ways. It's also hurting the North American financial industry," Feng said. "As a regulator, how do you make these people accountable?"

Richard Gilhooley, spokesman for the B.C. Securities Commission, the lead investigator in a probe of the Silvercorp case, said in an interview that the commission can and does investigate companies or traders even if the events take place in other countries. It has information-sharing agreements with the U.S. Securities and Exchange Commission and the China Securities Regulatory Commission, agencies that would be involved in any investigation around Silvercorp.

Further, the Investment Industry Regulatory Organization of Canada would be able to track down the names of traders. Warren Funt, IIROC vicepresident for Western Canada, said in an interview that the agency has the ability to monitor every trade in Canada, looking for trends of anomalies that might be a cause for concern. They can find out who did the trading and who the client was, he said.

Gilhooley said the BCSC can impose fines and impose trading bans, but it cannot lay criminal charges. It can and does, however, refer cases to the Crown for criminal charges.

The RCMP's Integrated Market Enforcement Team would conduct any criminal investigation.

ghamilton@vancouversun.com

Blog: vancouversun.com/hamilton
© Copyright (c) The Vancouver Sun

Read more: Smear campaign sends Silvercorp on roller-coaster ride

I have over $10k in SVM shares. I started to load up at the $8 range.

Quote:

Originally Posted by suzuka84 (Post 7722599)

I have over $10k in SVM shares. I started to load up at the $8 range.

So I'm presuming you'll think that the market will forget about the fraud allegations - however wrong they may be - and release SVM from its "China discount"? Interesting move. I'm really not sure what to make of it. I believe that the company is 100% honest. But as an investor, I need to know that others also believe that the company is honest. The company seems to have a market cap that makes it unlikely to be taken private either.

I... am so very excited for this week :) GLTE.

Quote:

Originally Posted by jasonturbo (Post 7723261)

I... am so very excited for this week :) GLTE.

i love this kind of positivity

Noob question...

What happens when a company wants to go private?

Generally speaking, the stock share's price often jump in value as the company generally
has to offer a premium/incentive over the current stock price to buy back the shares.

But what if the company is currently halted, and wish to go private?
What kind of prices should I be expecting?

Quote:

Originally Posted by Sky_High (Post 7723606)

Are you holding sino-forest?

Quote:

Originally Posted by DOHCVTEC (Post 7723607)

Are you holding sino-forest?

Yup. :okay:

what are you guys doing up? Can't sleep either....? =(

I'm based in London UK, so it's 1:30pm here.

Quote:

Originally Posted by Sky_High (Post 7723608)

Yup. :okay:

Sorry to hear. But all may not be lost. If I may ask, what was your average price?

Quote:

Originally Posted by DOHCVTEC (Post 7723615)

I'm based in London UK, so it's 1:30pm here.

I see...good to know...
Gold prices affect my sleep/mood =(

Quote:

Originally Posted by DOHCVTEC (Post 7723616)

Sorry to hear. But all may not be lost. If I may ask, what was your average price?

6.45 :okay:

Quote:

Originally Posted by DOHCVTEC (Post 7722616)

I bought it as the share price is back to levels not seen in years. I was an early investor in new pacific metals so I figure it's better to own the big parent rather than the smaller sub.

FYI, All cash now.. cashed out on BAC around 5.7-8x on Friday. Still holding POT.. but I think I'm going to dump it once it goes back to regular price... gonna just start mixing GIC's and Bonds now.. I give up on this stuff

Quote:

Originally Posted by SiRV (Post 7724202)

If you're doing that, why don't you just pick a safe blue-chip with a nice divvy and forget about it? Give you a better return than GICs and Bonds and will have less volatility.

Off the top of my head: PG, JNJ, MO, PM, PFE, LLY. Add to those some resource-based stocks that play a divvy and forget about them.

Then for additional risk, allocate a small part of your portfolio to AGNC or a similar play.

Quote:

Originally Posted by SiRV (Post 7724202)

The average hedge fund YTD performance is -3% I think? You can tell many pro guys are even struggling in this market. Trader who blows up his or her account usually lack patience and discipline. If you are not comfortable playing both side of the market then just remain on the sideline. Cash is a position.

Quote:

Originally Posted by DaFonz (Post 7724280)

^Thanks for that.

Currently my online-savings account GIC offers a 1.75% GIC... I checked out the list that you provided, and alot of them still offer less than 1.2% (some <1%). What is AGNC though? I'm looking at it and I like it...

5% Dividends since 2009!... but it's only been up since that same time as well

Quote:

Originally Posted by SiRV (Post 7724300)

If you're going for GIC's, why not try ING's 2.5%?

ING DIRECT Canada: GICs

Sign up before end of the year, you get an additional $50 bonus for signing up too.

Quote:

Originally Posted by SiRV (Post 7724300)

I'm not sure where you're looking, but the annual yields on those stocks are:

PG - 3.27%
JNJ - 3.59%
MO - 5.68%
PM - 4.1%
PFE: 3.92%
LLY: 5.03%

Most of these stocks pay quarterly which is why you are getting confused. GICs pay annually.

What you want to do is buy them (allocate properly) and then set up an automatic dividend reinvestment program on them so that all dividends go towards buying more shares. The idea being that eventually you can live off your dividends.

AGNC is NOT, I repeat NOT a stock that you want as a core holding in your portfolio. They make money by borrowing cheaply at low interest rates and buying mortgages that have higher interest rates.

The annualized dividend yield for that stock is 20%. It's awesome now because interest rates are low, but the moment they rise, GTFO of the stock.

It is NOT a long term hold.

Edit: I think your problem is that you're going in without a plan. Take a step back and plan first or pay someone to write one for you.

You're right, I just realized I was looking at the quarterly yields.

But anyway, I wasn't really playing with much money anyway, just started playing with < 10 k in 08, and when I shot up to 15 (the whole CUU story), after that, I just got greedy and wanted to chase the next big thing that would turn into quick profits.. obviously that hasn't happened. But anyway, the ~10k that I have in my 'investment' portfolio is just a small amount that I'm kind of playing with to learn the ropes.

I'm looking (unknowingly) for posts / tips like the stuff you provided above on different ways to manage my portfolio long-term as this is FAR from my training in school. So the help is appreciated.

Quote:

Originally Posted by DOHCVTEC (Post 7722616)

It's a great company and at its current market cap it makes for an attractive entry point. I love the story. I first met the management team when they were trading at under a dollar. They made a good impression but I never jumped on it then watched as its market cap started to creep up before taking off. I made a few dollars holding NUX shares at 50 cents and got out around $1.50. My reasoning for buying SVM is I might as well hold the stronger parent company than the subsidiary. By holding SVM I still get exposure to NUX. My logic also forced me to dump Southgobi for Ivanhoe.