Gym, Unreconstructed

“I don’t want to be too comfortable. Once you get used to it, it’s hard to give up. I’d rather stay hungry.”

Joe Santo

4’ x 8’ Deadlift Platform Construction


  • (2) 2’ x 8’ 3/4” Pieces of Plytanium Plywood (1st Layer, Platform Foundation) — Lowe’s (4’ x 8’ Ripped Lengthwise) … $42.98
  • (2) 4’ x 4’ 3/4” Pieces of Plytanium Plywood (2nd Layer, Platform Foundation) — Lowe’s (4’ x 8’ Ripped Widthwise) … $42.98
  • (1) 4’ x 4’ 3/4” Maple Plywood (Third Layer, Lifting Base) — Lowe’s (4’ x 8’ Ripped Widthwise) … $50.98
  • (1) 4’ x 6’ 3/4” Rubber Horse Stall Mat (L&R Plate Landing Pads) — Tractor Supply … $44.99
  • 1 1/4” Construction Screws … $18.95

Total Cost = $200.88


  • Drill
  • Coping Saw


Lay down the 4’ x 4’ Plytanium boards atop the 2’ x 8’ Plytanium boards; attach with construction screws (I used 42 screws). This is the Platform Foundation, so use lots of screws in order to ensure that it is rigid.

Lay down the 4’ x 4’ Maple Plywood Lifting Base atop the Platform Foundation. Center it and attach with screws around its perimeter (I used 16 screws).

Measure the Stall Mat into two 2’ x 4’ sections and rip slowly with the Coping Saw along chalked line. The Stall Mats are heavy and difficult to cut with razor blades. The Coping Saw proved an exceptional and almost effortless alternative.

Lay down one 2’ x 4’ Stall Mat on each side of the centered Lifting Base and attach with construction screws (I used 8 screws on each mat). You’ll have one 2’ x 4’ piece of Stall Mat left over. It makes a good 3/4-in step in front of the Deadlift Platform.

Start Lifting!

Notes: This Platform was designed to ensure that all materials would fit in a small van; you won’t need to rent a U-Haul truck.

By building your own Deadlift Platform, you’ll likely save ~$200.

The squat rack in the background of the first photograph was manufactured by Titan Fitness. In addition to squats, it’s used for pull-ups, seated presses and bench presses. We chose the Titan X-3 over the Rogue SML-1, as it enabled us to save an additional $200, which was invested in a Rogue Ohio Power Bar.

Home Gym Cost Breakdown

  • DL PLATFORM … $200.88
  • FULL BAR JACK … $55.30
  • OHIO POWER BAR … $302.40
  • SQUAT STAND … $334.36
  • BENCH … $71.99
  • PLATE RACK … $53.75
  • EVA MATTING … $79.83

TOTAL COST = $1,619.45

IRR = 1.7 Years

$DNN : Denison Mines — Independent Economic Analysis

Long-Term Price Case$65/lb. U308 $65/lb. U308
Flagship ProjectPhoenixGryphon
Project Percentage90% 90%
Mineral Reserves98,460,000 lbs. 98,460,000 lbs.
Shares Outstanding589,100,000589,100,000
Market Cap$342,267,100$342,267,100
Average Annual Production5.966M lbs.7.648M lbs.
LoM10 Years7 Years
Payable Product58.767M lbs.48.817M lbs.
True All-in Cost (TAIC)$39.20/lb.$47.83/lb.
Gross Revenue$3,819,855,000$3,173,105,000
Saskatchewan Revenue Royalties & Surcharges + Resource Credit($276,939,487)($230,050,112)
Total Operating Cost($194,347,597)($567,610,551)
Operating Profit$3,348,567,916$2,375,444,337
Saskatchewan Profit Royalties ($502,285,187)($356,316,651)
Income Taxes($904,113,337)($641,369,971)
Total Capital Costs($425,950,000)($539,660,498)
Net Income (Denison Share)$1,364,597,453$754,287,495
Net Profit Margin36%24%
Absolute Cost Structure (ACS)60%74%
MTQ Score (Higher is Better)0.60.3
True Value$3.60/sh.
True Value Discount (TVD)86%
Cash Flow Multiple10x5x
Net Annual Cash Flow$138,530,520$118,184,544
Future Market Cap Contribution$1,385,305,200$590,922,720
Total Future Market Cap Growth477%

Notes: All Values in U.S. Dollars

We boosted our stake in Denison Mines this morning by 25% following an updated analysis in which the company achieved a maximum in-house Composite Rating of 5. Denison Mines excelled in the following categories: Net Profit Margin (Phoenix), Absolute Cost Structure (Phoenix), True Value Discount, and Market Cap Growth. Our Target, however, has been lowered by 20%, as our updated calculations implied a True All-In Cost (TAIC) that was higher than expected for Phoenix, while Net Profit Margin and Absolute Cost Structure for Gryphon were average.

MTQ Scores & Composite Ratings — Study Group Comparison

$NTGSF : Golden Predator — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au
ProjectBrewery Creek
Mineral Resources577,000 ozs.
Shares Outstanding132,981,088
Market Cap$49,163,108
Average Annual Production53,853 ozs.
LoM9 Years
Payable Product484,680 ozs.
True All-in Cost (TAIC)$1,291/oz.
Gross Revenue$823,956,000
Freight & Marketing($1,938,720)
Smelter Deduction($4,119,780)
Gross Income$784,939,260
Total Operating Cost($377,081,040)
Operating Profit$407,858,220
Income Tax($122,357,466)
Total Capital Costs ($116,973,363)
Net Income$168,527,391
Net Profit Margin20%
Absolute Cost Structure (ACS)76%
MTQ Score0.3
True Value$1.27/sh.
True Value Discount (TVD)72%
Cash Flow Multiple5x
Annual Cash Flow$22,025,877
Future Market Cap$110,129,385
Future Market Cap Growth124%

Notes: All Values in U.S. Dollars

ACS Curve Impact on MTQ Score

For stocks under study, Absolute Cost Structures (ACS) above 70% are associated with rapid falloffs in MTQ Scores and low MTQ Scores are predictors of low Net Profit Margins.

We will be monitoring stock price performance of a basket* of stocks over the next 24 months in order to establish whether or not there is a statistically significant correlation between price performance and MTQ Scores.

If we are able to ascertain that MTQ Scores serve as predictors of price performance, those scores will become cornerstones of our stock selection process.

*Fahy Capital Management does not necessarily own shares of the stocks under study.

$RIOFF : Rio2 Limited — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au
ProjectFenix (Cerro Maricunga[OLD])
Mineral Reserves3,743,000 ozs.
Shares Outstanding118,239,464
Market Cap$38,427,826
Average Annual Production227,895 ozs.
LoM13 Years
Payable Product2,962,630 ozs.
True All-in Cost (TAIC) $1,333/oz.
Gross Revenue$5,036,471,000
Gross Income$4,784,647,450
Total Operating Cost($2,748,135,588)
Operating Profit$2,036,511,862
Income Taxes($549,858,203)
Total Capital Costs ($398,900,000)
Net Income$1,087,753,659
Net Profit Margin22%
Absolute Cost Structure (ACS)78%
MTQ Score0.3
True Value$9.20/sh.
Cash Flow Multiple5x
Annual Cash Flow$83,637,465
Future Market Cap$418,187,325
Future Market Cap Growth988%

Notes: All Values in U.S. Dollars

The Fenix Project is on the high end of the TAIC curve. It will need higher gold prices to be viable. Above $1,700, Net Profit Margin becomes sustainable. It is important to note that social investment costs will be much higher than envisioned by Atacama Pacific and that will have a further deleterious impact on margins, as has the 35% increase in Chilean Corporate Taxes since 2014.

MTQ Score Comparison

MTQ Scores of Recently Evaluated Stocks

Note: A high score (> 0.5) implies a greater-than-even chance of an enterprise exhibiting both a high Net Profit Margin and low Absolute Cost Structure at the Long-Term Price Case at which it was evaluated.

Our Hypothesis: High MTQ Scores are a reliable determinant of Future Market Cap Growth

The MTQ Score is the 4th pillar of our updated valuation methodology. It will be published in future analyses alongside TAIC, ACS and True Value.

$URG : Ur-Energy — Independent Economic Analysis

Long-Term Price Case$65/lb. U308$65/lb. U308
ProjectLost CreekShirley Basin
Mineral Resources13,252,000 lbs.8,816,000 lbs.
Shares Outstanding143,400,000143,400,000
Market Cap$131,928,000$131,928,000
Average Annual Production1M lbs.500,000 lbs.
LoM12 Years14 Years
Payable Product12,191,840 lbs.7,052,800 lbs.
True All-in Cost (TAIC) $35.61/lb.$38.29/lb.
Gross Revenue$792,469,600$458,432,000
Gross Income$760,770,816$440,094,720
Total Operating Cost($177,757,027)($102,547,712)
Operating Profit$583,013,789$337,547,008
Wellfield Development($118,504,685)($55,152,896)
Sweetwater Property Tax($1,584,939)
Wyoming Severance Tax($10,226,560)
Carbon County Ad Valorem Tax($16,362,496)
County Property Tax($1,128,448)
Income Taxes($89,244,269)($40,130,432)
Total Capital Costs ($15,400,000)($26,200,000)
Net Income$358,279,896$204,708,672
Net Profit Margin45%45%
Absolute Cost Structure (ACS)55%59%
True Value$3.92/sh.
Cash Flow Multiple10x
Annual Cash Flow$29,390,000$13,355,000
Future Market Cap$427,450,000
Future Market Cap Growth224%

Notes: All Values in U.S. Dollars

There is a great deal of value in Ur-Energy that hasn’t been baked into price. Were shares to trade between 30-40% lower in a general market decline, we would be buyers.


At $65/lb., Ur-Energy will achieve excellent Net Profit Margins and enjoy an Absolute Cost Structure that will elude peers (On its worst day, the company’s TAIC won’t rise much above $36/lb.).

Update, 13 July ’19

We do not presently have exposure to the uranium sector in the U.S., and in light of recent developments, the likelihood of our future participation has dropped. Any consideration of a U.S. issue will necessitate a substantial discount to our estimate of True Value. In the case of Ur-Energy, an additional 20% discount to the 12 July close will be essential before a small initial stake is considered.

More likely, future exposure to the U.S. uranium sector will be gained via exposure to Cameco’s Crow Butte and Smith Ranch-Highland Projects, though at that time, we believe Cameco shares will be available to us up to 30% cheaper following a general market decline.

$EANRF : Eastmain Resources — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au
ProjectEau Claire
Mineral Resources1,001,100 ozs.
Shares Outstanding221,884,037
Market Cap$26,115,751
Average Annual Production79,200 ozs.
LoM12 Years
Payable Product951,000 ozs.
True All-in Cost (TAIC) $1,271/oz.
Gross Revenue$1,616,700,000
Total Operating Cost($612,522,240)
Operating Profit$1,004,177,760
Income Taxes($313,503,994)
Total Capital Costs ($283,000,000)
Net Income$407,673,766
Net Profit Margin25%
Absolute Cost Structure (ACS)75%
True Value$1.83/sh.
Cash Flow Multiple5x
Annual Cash Flow$33,976,800
Future Market Cap$169,884,000
Future Market Cap Growth551%

Notes: All Values in U.S. Dollars

$EQXFF : Equinox Gold — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au $1,700/oz. Au $1,700/oz. Au
ProjectMesquiteAurizonaCastle Mountain
Mineral Reserves1,004,000 ozs.971,000 ozs. 3,560,000 ozs.
Shares Outstanding553,000,000553,000,000 553,000,000
Market Cap$508,760,000$508,760,000 $508,760,000
Average Annual Production97,429 ozs.136,247 ozs.172,727 ozs.
LoM7 Years6.5 Years16.2 Years
Payable Product682,803 ozs.885,608 ozs.2,798,173 ozs.
True All-in Cost (TAIC) $897/oz.$1,145/oz.$1,233/oz.
Gross Revenue$1,160,765,100$1,505,533,600$4,756,894,100
Gross Income$1,134,068,000$1,430,256,920$4,552,347,654
Total Operating Cost($545,696,000)($568,252,500)($1,992,299,176)
Operating Profit$588,372,000$862,004,420$2,560,048,478
Income Taxes($14,120,928)($258,601,326)($763,918,465)
Total Capital Costs ($26,177,000)($111,940,851)($488,700,000)
Net Income$548,074,072$491,462,243$1,307,430,013
Net Profit Margin47%33%27%
Absolute Cost Structure (ACS)53%67%73%
True Value$4.24/sh.
Cash Flow Multiple10x
Annual Cash Flow$234,516,081
Future Market Cap$2,345,160,810
Future Market Cap Growth361%

Notes: All Values in U.S. Dollars

Q2 Updates

In Q2, we reduced our exposure to uranium and increased our exposure to gold, silver and agriculture; our allocations to platinum and rare earths remain unchanged.

At Fahy Capital Management, our investment decisions are based upon quantitative data. Analysis of that data enables us to execute in what we perceive to be a timely and prudent manner. When our data suggest the gap between price and value has closed, we sell. This approach ensures that we do not fall in love with a particular idea or stock. We perceive stocks as inventory and we like to see that inventory get worked off.

Over the course of a 12-month time frame, we typically expect inventory to be reduced by as many as 2 or 3 names, and this has proven a rate that allows us to reinvest and grow.

New Directions

We remain committed to the value proposition, but how we arrive at determinations of value is changing. We have developed new formulas and new ratios that we believe better reveal the merits and shortcomings of businesses under investigation, while conferring to us an edge on the hairy margins.

We are looking forward to sharing some of our results here in our blog. Those results, however, don’t constitute a recommendation to buy or sell; it’s just food-for-thought.