below 1 dollar now, page-3

Extract from today's Eureka report:
"Troy, however, is a good starting point to examine companies with the cash and a strong outlook.

Much of Troy’s $60 million cash hoard came from the mid-year sale of a stake in a Canadian gold company. It was a well-timed exit, with Troy getting $C6.15 a share for its interest in Comaplex Minerals (Canadian-listed Compalex is now trading at $C2.51).

“A lot of junior companies have suffered because of a perception that they need access to capital markets,” Benson says. “That’s not our position.”

Benson, who joined Troy last year after a career with BHP Billiton and Rio Tinto, became so frustrated that he wrote to shareholders earlier this month pointing out what he saw as the obvious gap in the market’s valuation of Troy, which is trading at $1.01, a fraction of the $3.99 peak price reached in January.

He was particularly puzzled by the minimal stock market value assigned to Troy’s Andorinhas gold mine in Brazil, which is producing 50,000 ounces of gold a year at a cost of $US300 an ounce. At the current gold price of about $US770, that implies an annual profit from the mine of more than $US20 million.

There also appears to be no value put on a small iron ore mine, which is close to starting production near Andorinhas (or may be sold to generate even more cash), or on two gold processing plants in Australia, one in storage in NSW and one still operating at Sandstone in WA.

“By any measure, I believe the market is significantly undervaluing Troy,” Benson says. He also hints that Troy will use its cash to buy low-priced assets “to take advantage of opportunities that no doubt will surface over the coming months”. The irony of that comment is that Troy itself is one of the opportunities that has surfaced."