Deccan Gold Mines
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2397
Printed Date: 21/Apr/2025 at 3:11pm
Topic: Deccan Gold Mines
Posted By: Monkey
Subject: Deccan Gold Mines
Date Posted: 18/Sep/2009 at 4:33pm
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Deccan gold mines is company in the business for prospecting and mining gold in India, mostly in south India.
Company's equity is small, about 6 crores, with share face value of Rs. 1/- each. This means about 6 crores shares are issued out of which 28% are held by public. Promoter holding is 51% with another 11% held by other foreign companies.
Balance sheet size is small, about 14.5 crores. About 9.5 crores are invested in units of mutual funds. Balance money are spent in exploration activities.
Company has zero debt. This give it flexibility to borrow, if required.
Company has no sales as it is still at exploration stage of business. There is lot of inofrmation about company's prospects on its web site. However, this is not area where I understand much.
The stock can be treated as highly leveraged play on increasing gold prices, more like a perpetual call option on Gold price and Company's chances of finding Gold.
Currently, stock price has run up a lot along with rise in Gold price and general bullishness of overall market, giving the company market cap of about 190 crores.
I do not think that buying it at current prices is justified. However, on a deep correction, this can be bought as call option as I explained above.
In addition to risk of failure in finding viable, minable Gold, another risk is dilution of equity to raise funds for mining even if Gold is found viable for mining activities.
I would like to know if any forum member has idea on this company or any opinion about investing in such companies.
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Replies:
Posted By: gyansr
Date Posted: 18/Sep/2009 at 6:29pm
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Most of the times market logic surprises me. How can people give some company a valuation of 200 crores just coz they say that they are searching for gold and there are a lot of prospects. That way I am also searching for diamonds, and I can also conjure up some prospects. will someone give me a valuation of say at least 100 crores |
Posted By: smartcat
Date Posted: 18/Sep/2009 at 7:01pm
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Do you have mining rights for diamonds in Mozambique? Mining rights in an area which has prospects of an expensive mineral deposits has a value - don't ask me how much. The "call option" logic is pretty good.
If they don't find gold, they'll probably build some apartments there :)
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Posted By: vishmitt
Date Posted: 18/Sep/2009 at 7:08pm
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Any idea on management integrity?
The stock had ran a lot during last leg of the bull market - 5% up circuits, and then ofcourse, 5% down circuits :) Punter's delight...hope rest is understood...
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Posted By: manishdave
Date Posted: 18/Sep/2009 at 7:41pm
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Bye the time (if) they find gold and bring that to mkt., boom in gold will be over. Won't happned in next 8-10 years.
It is not even enough to "find" gold. It has to be viable. Better register with ICICI and invest in Canadian juniors. You will find better value. And for valuation example, Nother Dynasty Minerals has mkt cap of $665m. They have already spend lots of development money plus 40-50m cash on hand. It is going to be THE largest GOLD/Copper/Moly mine. Their minerals in ground at current metal prices should be anywhere between $300-400B. And mine is going to be viable because of quality of ore. So $40m(Deccan) is too high for a company that is "looking" for Gold.
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Posted By: tigershark
Date Posted: 18/Sep/2009 at 8:55pm
california dreaming
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: smartcat
Date Posted: 18/Sep/2009 at 12:25pm
| SOTP practitioners already assign anywhere between Rs. 100 to Rs. 500 to the value of Reliance Industries for the NELP blocks awarded to them! |
Posted By: j2eeprofessiona
Date Posted: 21/Sep/2009 at 5:38pm
| i remember PN Vijay once recommending this stock in 2007... |
Posted By: Monkey
Date Posted: 22/Sep/2009 at 11:09pm
Manish,
I would like to know on how to register with ICICI as you mentioned. I checked their website etc but could not find any details. Please provide details you have.
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Posted By: ZeeNut
Date Posted: 24/Sep/2009 at 8:18pm
| http://www.theequitydesk.com/forum/member_profile.asp?PF=1004&FID=38 - gyansr , I absolutely agree. |
Posted By: manishdave
Date Posted: 24/Sep/2009 at 8:23pm
ICICI portal offering trade in overseas stocks
http://www.livemint.com/2007/10/09002029/ICICI-portal-offering-trade-in.html - http://www.livemint.com/2007/10/09002029/ICICI-portal-offering-trade-in.html
Trading miners is very different game so do your proper homework. I suggest go through some presentations and conference calls of different miners.
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Posted By: rajnsharma
Date Posted: 24/Sep/2009 at 9:17pm
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Posted By: Monkey
Date Posted: 18/Oct/2009 at 12:56pm
| http://www.indianstocksnews.com/2009/10/small-cap-stock-to-buy-with-golden.html - http://www.indianstocksnews.com/2009/10/small-cap-stock-to-buy-with-golden.html |
Posted By: nazgul
Date Posted: 03/Dec/2009 at 3:52pm
after some lull good positive news about this one... http://stockmarkettoday.in/2009/12/03/deccan-gold-mines-up-5/ - here ------------- I don't do funds, i do fundas. |
Posted By: PKB2000
Date Posted: 03/Dec/2009 at 11:17am
Stock is in upper circuit. But I think the owner of company has reduced its stake time to time with increased valuation in the past. (I may be wrong) ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: dilip.r
Date Posted: 19/Apr/2011 at 6:29pm
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Still digging ? no GOLD ?????
Market cap 133 Crs!!!!
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Posted By: ramsey123
Date Posted: 19/Apr/2011 at 10:25pm
The last 2 FYs show some sales. What exactly did they sell  ?
I hope they dint find people willing to pay them for their idea. In which case...what an idea sirjee
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