This post was actually meant to cover Lappland Goldminers (LG), however I discovered an interesting 'relation' with Northern Lion Gold (NLG), so therefore I will very briefly cover them as well.
First off, LG is listed on the Stockholm First North, quote GOLD. Only two months ago was LG a pure exploration company (active in Sweden and Finland), but during these last two months they've started up two gold-mines. Some people outside of the nordic countries may have heard of the company as their Fäboliden gold-discovery is one of the largest in Europe. Fäboliden is also the main-project of the company. Fäboliden is located on the (relatively recently discovered) so-called gold line in northern Sweden, which stretches all across Sweden (south-east) into Finland (australian Dragon Mining is active here as well). LG has plenty of other projects on the gold line and some are very close to Fäboliden, whereto ore will be transported into a very large processing facility which is under construction (although in very early stage). The ore-reserve of Fäboliden is today about 2.4M ounces of gold (indicated and inferred - cut-off 0.4g/t) and is still open. The ore-grade is about 1.5g/t, but recent test mining revealed a grade of 3.4g/t, so the ore-grade might have been underestimated (but that remains uncertain) - and one should not completely discount the accompanying silver in the ore which is at a 1:3 ratio over gold. The planned Fäboliden mine will be open-pit at first and then extend under ground as the deposit is mostly open at depth and also appears to host greater ore-grades at depth. There are 14 other projects on the gold line in vicinity of Fäboliden, most of which have shown very interesting results (drill-cores with some grades much higher than Fäboliden - example: 5m of 4,15g/t at Tjålmträsk), but are still in fairly early stages; it is looking very likely however that these projects will be holding considerable resources to be transported to Fäboliden as the ore there starts to run out.
The Finnish part of the gold line is envisioned to have about the same set-up as in Sweden, where today the largest project is the Haveri (which was bought from NLG). Haveri has a resource of about 300,000 ounces of gold at 1.37g/t today. Haveri and the Finnish gold line is at an early stage but looks very likely to become very significant in the future.
The now operating gold-mines of LG have both been purchased from a small Swedish mining company that went into bankruptcy in 2007 (purchase was made with about $5M) - the bakruptcy was mainly due to management incompetence. The first mine, Pahtavaara, holds only about 75000 ounces of gold reserves today (at average grade 2.2g/t), but is open at depth and has potential in the surrounding region. Pathavaara will be running for at least three years and is estimated to give a good profit. The second mine, Blaiken, is estimated to produce 30,000 ounces a year, and has a resource of about 120,000 ounces gold at 3,6g/t, LG-management say that they see great potential here as this mine is also located on the gold line.

The mcap of LG is today about 600MKr, which is about $70M. I think if you compare this mcap with companies like the recently covered ITH, then it does not look too bad. LG has until now been financed mostly by equity-financing, but it isn't unlikely that they will be able to carry on with their main projects without further dilution or big loans as they have operating mines that will add a significant income, at least for a few years (and surely enough to cover the incredibly cheap purchase-price).
Ok, so what about NLG? The interesting thing about NLG is that they are the number one holder of LG-shares among publicly traded companies. The mcap of NLG is today no more than about $2M and they hold 2.5% of the LG shares. This means that the mcap of NLG is about the same as the value of their LG-shares... now, I don't have time to dig deeper into NLG today ... but that is an interesting fact.

To conclude, I really like LG, I don't know if this post really does fairness to the great potential of the Fäboliden project and its surroundings, if you want more information they have an english website. If you want to get in on LG and you don't want to buy shares on the Stockholm First North, then maybe Northern Lion on the TSX (or Frankfurt) is something for you.

completely unrelated:

What countries will be the first to recover from the economic downturn (or hurt least from it)? I would say countries with small amounts of debt of any sort (public/private/consumer), countries with governments that lower taxes and cut military spending instead of throwing tax-payers money away and countries with broad and fairly independent economies - that is, countries that can supply themselves with pretty much all they need and who have a well-balanced exchange of goods with a wide variety of countries.

The description above fits pretty well for Russia, and I would argue that it is the exact opposite of the situation for the US and many west-european countries. Modern Russia has only existed for twenty years, they had a huge economic crisis in the country in the late 90's and they actually balanced their first budget in 2000 since the break-up of the Soviet Union. In the late 90's Russia saw inflation of almost up to 100%, which has since decreased, but is still fairly high at around 10%. These high inflation-rates has kept the interest-rates high all through the 00's and therefore hindered a boom of consumer-debt like the one we had in the west. The strong growth of Russia in the last nine years has been the main factor for the high inflation, which now seems to be slowing down - of course with the growth, but the growth is still estimated to be positive in 2009 although estimates vary from 1-6%.
There seems to be a persistent viewpoint that Russia is dependent on high oil prices, well the truth is that the high oil-prices has given the Russian government a pretty good surplus of income - much of which has been saved and now makes up a foreign reserve of about $400bn. Even with these lower oil-prices the Russian federal budget might very well still be postitive; and certainly, the lower prices of natural resources will greatly decrease income for many Russians as well as the government - but it isn't necessarily the end of the world (or the end of Russia). The main driver for Russia's growth has been domestic demand and oil and gas contribute only about 5% of the Russian GDP.

Almost all of the federal debt in Russia has been paid off today and stands at only about $13bn. Consumer credit is basically nothing to worry about, as I mentioned earlier. Private debt (we're talking foreign debt here...) is however a slight problem and is something that has been heard about alot lately - perhaps mostly in the form of 'the rouble has lost much of its value...' (because foreigners want out). The debt-load stands at around $425bn and the governement has so far helped by paying $73bn off the earlier debt-level. If you consider the willingness of the government to help out the private sector by buying their foreign debt, it seems that this problem might not be so great after all, since the Russian government actually has a reserve matching almost exactly this foreign debt in the private sector. Besides, not all foreign money is going out of the country and these companies are not in bad shape because they are unable to make money - they're in bad shape because they can't pay up large sums of money in such a short time.

If we make a little comparison with the US here... the private debt in the US today stands at about $30 trillion, that is about 75 times the Russian foreign debt. Of course the Russian GDP is only $1,7 trillion while the US GDP is at 14,3 trillion, but the difference is pretty striking; if Russia were to match the private debt of the US, it would have to be somewhere around $3.5 trillion! I guess I don't have to make a comparison of the public debt here? As I said, Russia $13bn - United States north of $10 trillion...

But what about the export-import situation? Well, Russia today has a positive export and a healthy level of trade with mostly european and asian countries. Considering that Russia still has a surplus in its trade, it would seem reasonable that it wouldn't be so hurt by its exports falling, as it can still keep imports up - athough these would also shrink. In 2007 exports were $365bn and imports were $260bn. So, that is a pretty big part of the economy, but in a very good position to withstand drops in exports. I guess we're all very familiar with the situation in the US, heavy imports from China and lots of out-sourced jobs to countries like India. Russia can pretty much produce anything it needs and whatever it can't produce, it can easily import because of its large exports. The US on the other hand doesn't produce everything at home and has a huge deficit in its trade-balance, so maybe one day the people in the US will be unable to get stuff from China, if the chinese realize that they're really getting nothing but pieces of paper from their "trade-partner".

Politically, as I hinted in the beginning - Russia has lowered taxes to help people and has also decided to cut military spending. The US has given away trillions of dollars to incompetent and corrupt bankers and is trying to force the american public to keep borrowing money, although they've already borrowed way too much, and also overlooking the fact that this is also the cause of the economic trouble in the first place.

Ok, that post got kind of big, but I hope you learned something - I certainly did, and I think that if I haven't missed some big piece of information, then Russia is a great place to invest today and in the years ahead, especially since the russian stock-markets are down to dooms-day levels.

PS. I forgot to mention the stabilization fund, which stands at about $150bn and is actually meant as a buffer for fluctuations in natural resource prices, so I guess this strengthens the case further.

This post from 1997 is hilarious, if you compare it with the situation in the US today:
http://www.heritage.org/research/russiaandeurasia/em481.cfm

I used to hold this stock back in 06-07, when great results started coming in and the share did some great appreciation; however I kind of forgot about this company after I sold and now that the oil-price has all but crashed it might be interesting to do a little follow-up.

PMG is an out-growth from Petrobank (TSX PBG). The mcap is about CAD$800M. They are currently active in Colombia, and since recently, Peru; where the main-focus is on conventional oil, but also heavier types of oil (just like PBG). They hold vast areas of land with great potential in all oil-categories. At this time the heavy oil findings are not too relevant as they require a higher oil-price to be interesting, so I'll focus on their light oil production, but of course the heavy oil will hold a great leverage when oil starts moving up again.
The expansion of PMG has been a very quick one, from having produced practically nothing only recently, they're now producing about 25000 bopd (end of january 2009). The oil-bearing rock of the PMG lands is one with a very large amount of smaller oil-reservoirs. In the latest estimate the 3P reserves of PMG stand at about 52 mmbbls, which is worth almost $2B at an oil-price of $35. The trend is fairly clear here, PMG keeps drilling new wells all over the place and production keeps increasing strongly with reserves. The strategy of going after many smaller reservoirs in these areas of the world has proven very lucrative. Considering the large land-holdings that they have and the recently increased holdings in the region, it's hard to see a soon ending in the growth - the only thing that would slow it down is lower oil-prices.
It is far from unlikely that oil wouldn't be able to drop further, but either way the world will need oil and if prices drop then PMG will simply have to slow down production and exploration, I strongly doubt that they would go bankrupt or that they would be forced to sell holdings; but profitability might very well be depressed severely - although I guess that would only last for shorter periods of time, the world will pick up again in a couple of years and the demand for oil will be as good as ever. The profitability of the operations in PMG looks pretty good; for Q3 of 2008 the production cost was only $8.02 per barrel, which would leave a pretty good margin even if the oil-price would dive further.

So, is it a good idea to buy PMG today? I would say both yes and no. Oil might drop further and in the shorter term the SP could take a strong dive; in the future oil will move higher (we're probably talking years here) and in this time PMG might still keep growing in reserves and production so that the SP might stay somewhat stable and then kind of shoot of when oil begins to climb higher again. The appreciation of SP I guess would be strong and swift when oil turns up, so to be sure to be part of it you might want to buy in advance. Let's not forget that oil is a great protection against inflation and in comparison with gold, oil simply looks cheaper.

Remember peak-oil?

ITH is a somewhat mature prospecting company with focus on North America. Mcap today stands at about CDN$130M (150M fully diluted). ITH has many highly interesting projects, but I will exclusively look at the Livengood project here, since it is the main factor for the share-price of ITH.

Livengood has seen exploration since the 1970's and was acquired by ITH (along with other projects) from Anglogold in 2006 by a 6M share issuance. Livengood today holds about 10M ounces of gold as indicated and inferred resources (and is still open for expansion), and this is at a very low cutoff grade of 0.3g/t (cutoff means that if recovery of gold is lower than 0.3g/t then it isn't economic), where the average grade is 0.64g/t (indicated) and 0.57g/t (inferred). This scenario is one of a very large heap-leach deposit, other scenarios are possible but give higher cutoff and therefore smaller resources. I don't know exacty how management comes up with this cutoff, but I would assume that they know what they're talking about. So basically, at todays gold-price this would be a very profitable operation, the only question then in order to know wether to buy or not is to look at the prospect for a long-term high gold-price. I beleive that the margins for this project will be very thin and this project could easily be suspended if gold drops.

The gold-price today is being pushed higher mainly from investment demand; things are crashing around us, nobody knows what's going to happen and there are worries both politcal and monetary. People are just interested in preserving wealth and so far gold has been excellent at doing this. I don't see any particularly strong signs of greed-driven price-appreciation today as the fundamentals continue to stay strong and there really isn't a light at the end of the tunnel yet.
What does this mean in terms of time? Well, just looking at what the governments of the world are doing and the fact that the people of the world are as clueless as the politicans are, these fundamentals for gold could very well last for perhaps as much as ten years ahead... maybe even more - because the only thing that could stop these 'fundamentals' is that the governements of the world stop trying to spend their way out of this mess and come to some real economic sense. The other alternative is that the politicans will screw everything up so badly that they will be forced to abandon the whole economic system and start anew - which alternative is better I really don't know.

So, we're looking at high gold-prices for a fairly long time ahead, and in the case of ITH I think we should be a little worried about moments in this gold-bull when things might look like they've cleared and people start pulling out like crazy from gold - this would greatly hurt an operation like Livengood. If the mcap of ITH is weighed to other companies in similar situations, it doesn't look too great; with such low grades it is a very risky thing to start up a huge operation. It is more common than not that a mining-operation is slightly overestimated in its profitability, and in this case an overestimation could easily prove fatal. But, I don't doubt that at todays prices the Livengood would be profitable and with these kind of margins it would also hold a very strong leverage if the price of gold were to go up - which isn't unlikely.

To sum it up, I think that ITH today represents more of a gambling-stock on the price of gold, if the price rises then the margins of Livengood would improve greatly and could give you a great leverage for gold. If gold drops, perhaps only for a while, the Livengood-operation could be in big trouble. Compared to other exploration-stocks you actually get a different type of leverage here, since they've already proven up a huge resource, unlike other exploration companies where they're still looking, and all they really got is hope - here you know what you get and if you beleive in price-appreciation for gold then this is pretty much a guaranteed great leverage.

Millicom is mainly a provider of mobile-telephony in third world countries (in total 16 countries), with a revenue-growth of 30% in the fourth quarter, now has an mcap representing about a p/e of 10 for 2008 (46.72USD per share). They showed an impressive EBITDA-margin in the last quarter of 45%! They have a net debt of about $1.5B, which holds a 1:1 ratio to full-year EBITDA-profit. Steps haven been taken to avoid revenue-loss from swings in currencies, however q4 revenue was hurt by 3% from currency depreciation.
Today most of the growth in the company comes from africa where some countries have a growth of almost 100%, second is asia with growth rates of around 70%. Apparently growth is slowing down somewhat in central- and south america, but still at about 20-30% (being also the largest market for Millicom).
So, everything is looking pretty good so far; only trouble Millicom has really had is from countries that have taken the licence away and basically just shut the company out of the country, it's very hard for me to judge if this will happen again, but it definitely is somewhat of a wild card here. Other than this there are a bunch of other companies competing with Millicom, which in the long run should push down margins. And another 'problem' is that the impressive growth of Millicom has been created by constantly investing all the profit into new infrastructure, so dividends are not in the pipe-line for a long time I would guess.

The key here to be able to decide wether to buy or not is to know what the economic outlook really is for the countries where Millicom is active. If the global economy was no issue then Millicom would probably be valued at a p/e of 20 right now. Considering the great uncertainties of where we're headed, let's just see what the worst thing that could happen in these third-world countries really is.
The greatest danger lies in central- and south america, where the penetration of subscribers is alot higher than in other countries, where competition is harder and where the economies are much closer to the global economy and of course the US. Latin american economies are fairly dependent on production of natural-resources for export, so this would be a big problem if prices keep dropping. But, even if the exports basically come to a halt, people will still be wanting to call eachother... so, I suppose that maybe a drop of something like 50% of revenues here is not impossible, but it's a long way there and I think that if things start to get bad in these countries you will be able to pull out before any great losses would be had. In the other countries I would say that the greatest risk is actually political, and that's something that you simply can't predict.

To conclude, I think that Millicom is a great investment in these uncertain times - you get out of uncertain currencies, you get out of (historically) highly priced gold and you get out of the countries that can fall the hardest. It would take alot to bring down Millicom in these times, we shouldn't overlook the possibility of them being bought out either, this is something that was being discussed when they were valued much higher...