Tanzanian Royalty: No gold, where's the value? -Barron's
NEW YORK, April 12 (Reuters) -
Tanzanian Royalty Exploration Corp (TNX.TO), a gold explorer has no revenue, no earnings and no proven gold and could be substantially overvalued, Barron's said.
Its shares trade at premium to peers, and its chief executive has been selling shares, Barron's said in its April 13 edition.
Chairman and CEO James Sinclair is famous for correctly forecasting gold prices and is very bullish on the metal, but he has been a steady seller of shares of his own gold-related company, Barron's said.
While Sinclair has had success predicting gold prices, the company does not have a good track record of finding gold, Barron's said.
The small-cap Canadian outfit has been looking for gold for a decade but none of its properties, all in Tanzania, have shown economically viable miner reserves, Barron's said.
If it were valued more like its rivals with similar cash and gold reserves, its shares should be priced substantially lower than the current $4.05 per share, Barron's said.
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Tanzanian Royalty says Barron's report misleading
TORONTO, April 13 (Reuters) -
Tanzanian Royalty Exploration Corp (TNX.TO) said on Monday that a recent article in the financial weekly Barron's mischaracterized the company, as its business model is essentially that of a royalty company.
The Barron's article in its April 13 edition said that Tanzanian Royalty, a gold explorer, has no revenue, no earnings and no proven gold. and could be substantially overvalued.
The report said shares of the company trade at a premium to its peers, and that its chief executive has been selling Tanzanian Royalty shares.
"In comparing the business structure of our company to others, it might have been more appropriate to select a company in the Royalty business including those with royalty-based gold production," CEO James Sinclair said in a statement.
The small-cap Canadian outfit has been looking for gold for a decade but none of its properties, all in Tanzania, have shown economically viable miner reserves, Barron's said.
If it were valued more like its rivals with similar cash and gold reserves, its shares should be priced substantially lower, Barron's said.
However, Tanzanian Royalty disputed a number of claims made in the Barron's article.
"To be a failed exploration company you need to be two things: First you must fail, and secondly you must be an exploration and development company.
Seeing the majority of our properties fall under royalty agreements, this is hardly a fair categorization of the company by Barron's," Sinclair said. (Reporting by Euan Rocha; editing by Richard Chang)
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