We are initiating a new look at exploration plays we expect could do relatively well in 2010 and have come up with an initial trifecta* list of juniors that for one reason or another seem to have a good balance between risk and reward in our opinion. We will try to provide more detail on these companies later but as usual there is a chance this update might not happen for a while (if at all), so please use the comment section to ask questions and that way we can communicate our thinking quickly and clearly without spending many hours writing up a detailed prose on these companies in order to answer very basic questions that are already answered on each respective company’s website.
*In horse racing, a trifecta is a bet where the bettor must pick the first, second and third place finishers in exact order. Our trifecta “bet” will be made in a similar fashion because we believe these 3 companies have the possibility of being among the biggest winners of 2010 and we are also indicating which of the three we believe has the greatest appreciation potential.
In any case, let’s get to it and review our criteria. First, we wanted to pick companies in good mining jurisdictions to avoid any potential worries from geopolitical or social issues. So we picked one company from each of Canada, the U.S. and Mexico. Second, we wanted to pick mainly gold but also silver. Third, we wanted the companies to have exploration or development programs ongoing or pending. Fourth, we wanted smallish market capitalizations. Fifth, we wanted at least reasonably competent and honest management. Sixth, we wanted projects in world-class mining districts. Seventh, we wanted recent evidence of potential new discoveries being made either by the company or another company working in the same district. Eighth, we wanted the company to hold a reasonably-large land position in the district and not just a few acres or hectares. Ninth, we wanted the projects to be brownfield with excellent nearby infrastructure. And last but not least tenth, we wanted the companies to be currently trading significantly below their 52 week highs.
So, without further ado, here we go with our “trifecta” picks starting with the company we feel has the greatest appreciation potential, then the second, then the third:
Oro Silver (TSX-V: OSR) — Oro Silver has a district play in Zacatecas, Mexico near the Fresnillo mine, holding one of the larger land positions on prospective portions of mineralized trends that have produced several hundred million ounces of silver historically. Market capitalization around $10 million, competent management and exploration team, eye-popping assays last year close to existing mine workings with potential for significant expansion to depth and laterally, and MAG Silver recently discovered a major strike extension of the prolific Veta Grande vein (Oro Silver has an option to purchase the Veta Grande Mine and Mill).
PC Gold (TSX: PKL) — Exploring the historic Pickle Crow gold mine in northwestern Ontario, it seems like every time they drill to test a different mineralization type or mineralized zone, they come up with decent gold values. They have found gold deep, they have found gold shallow, they have found it laterally and off-kilter, they have found it in the historical quartz veins, in potentially disseminated form and in banded iron formations. The promotion of the company is a bit pushy and aggressive and so that’s a slight turnoff and they are diluting at a fast pace, but arguably this is what they have to do in order to advance their exploration program as fast as possible.
Coral Gold Resources (TSX-V: CLH) — The company holds a Carlin-style gold deposit of fair size (3+ million ounces of combined resources) called Robertson on the prolific Cortez gold trend in Nevada. Recent drilling by Barrick on a small nearby joint venture property discovered that the Roberts Mountain thrust and formation, the main host rock for much of the gold found on the Cortez trend, may underlie a portion of the Robertson property. Since circumstances favorable to mineral formation are also present as evidenced by the significant gold mineralization at surface, there is a strong potential that the Robertson property may contain significant blue sky exploration upside (at depth). While this potential is exciting, the more immediate upside for Coral Gold comes from the just-announced decision by the company to proceed with a scoping study on the near-surface heap leach potential at Robertson, which by preliminary estimates could contain 1.5 million ounces of gold. To properly put in perspective the value proposition offered by Coral Gold, we should also recall that the company was the jewel in the package of Cortez trend properties that Robert McEwen attempted to consolidate using his U.S. Gold vehicle in 2006, driving the share price of Coral Gold north of C$6.00. The deal was terminated when problems were encountered in converting Coral Gold’s financial statements into U.S. generally-accepted accounting principles within the required timeframe to close the transaction. Despite Coral Gold selling for a 90% discount to what Robert McEwen was willing to pay in 2006, the only things that have fundamentally changed since then are that the gold resource has grown, the exploration blue sky has increased and gold prices have gone up.
As mentioned in the beginning of this commentary, we will try to have more details later but for now we wanted to get this out while the companies continue to trade at reasonable prices. As with our other speculations, we prefer an approach of taking an initial stake of modest to moderate size and then adding on a pullback (assuming the drop in share price is due to the market doing its thing instead of circumstances turning negative). We can also add on strength especially if it is based on positive news that will sustain the share price in the medium to long term, but we are keenly aware (and you should be too) of the ease with which we can get caught up in chasing prices higher.
Disclaimer: We currently do not own shares in any of the companies mentioned herein but we will be buying shares of Oro Silver, PC Gold and/or Coral Gold in the days ahead especially if share prices remain at current levels or drop even further. We have not been paid by any party for writing this commentary. This is not investment advice, which you should seek from a licensed professional.
When researching this compelling list, which other companies of interest did you find, with just a few of the ten requisites missing?
Kaiser Bottomfish reviews PC Gold in this free article
http://www.kaiserbottomfish.com/s/Excerpt.asp?ReportID=367196
Sorry Guiseppe, I wouldn’t even know how to start answering that question, nor would I want to.
Solid premarket bids on Cardero. My Lexam got a nice pop, and I’ll be unloading soon for some corel possibly. I like the chart of peregrine diamonds. Decisions, decisions….
I think Oro Silver is the one I like less, despite I’m trying to buy it right now, mostly because I trust more your opinion than mine and secondly because of the very thin market cap.
I would have preferred a silver play but I suppose Oro Silver is more a gold play and if it wouldn’t exist another Oro Gold, this could be a more exact name for them.
I’ve followed this company in 2008 and I witnessed their slow decline while their silver projects pipeline has been impoverished of their ex-flagship project (Vetagrande mine and Mill) and their scheduled growth plans were abandoned from this team of ex-Placer Dome guys with their “impressive track record” (they were supposed to be producing right now!)…
I’ve been watching at the El Compas “impressive drill results” and I notice that the high grades are always very short, with no silver high grades but only gold ones.
Their current flagship project only shows a lilliputian 100k of Au Eq. resource and I was wondering if you could be so kind to better explain where their potential lies, other than in their 8 million cad market cap that puts a good floor under their shareprice, because I probably am missing the true growth drivers of this microcap…
Seems like Coral is very undervalued, however it may stay that way for some time. This upcoming drill program may change that however.
Could anyone comment on the near term price drivers for any of these three?
PKL – See above the note “and they are diluting at a fast pace, but arguably this is what they have to do in order to advance their exploration program as fast as possible”, from a recent SH post I noted that “and they are diluting at a fast pace, but arguably this is what they have to do in order to advance their exploration program as fast as possible”
So it is possible there will be dilution soon. However they are still drilling so prices may rise first, and if they don’t, the dilution maybe significant. Also the recent results seem to be quite narrow and deep.
However J Kaiser likes them, 2009-10-06 “PC Gold is a no-brainer to head higher during the next six months, and bottom-fishers who hold this junior should not even consider selling until the stock is trading above $2. As the stock is now well above the original bottom-fish buy range, up 176% from the $0.29 bottom-fish limit” http://www.kaiserbottomfish.com/s/Excerpt.asp?ReportID=367196
So I’m not so sure what to do now. I have in mind that explorers with ill-defined resources needing cash in a surely-due-soon end-of-QE-or-default-by-city/state/country-led downturn will be the bad place to be, again.
errata (could we have a preview please), second quote should be “Success with the winter exploration program will necessitate additional financing, possibly as early as April, 2010. Conversely, failure of the
program would, at the Company’s current burn rate, leave the Company with approximately $1,600,000 by May 1, 2010, which would be sufficient to sustain the Company for approximately 18 months if it were to restrict itself to general and administrative expenses only”
Great timing on this one.
http://finance.yahoo.com/news/PC-Gold-Hits-Highest-Grades-ccn-41436203.html?x=0&.v=1
@gerininamo
Near term price drivers:
Oro Silver: drill results.
PC Gold: drill results.
Coral Gold: probably need to be patient for scoping study results.
Here is what I would add.
Oro Silver: The potential here is that they are in the top gold-rich zone of a vein system that could turn out to be another Juanicipio (you know, that “little” vein JV of MAG Silver).
PC Gold: This is narrow vein gold land so of course the intercepts are going to be narrow. The point is that they seem to extend for very long distances vertically and perhaps laterally and that still adds up to a lot of ounces, just ask Rob McEwen about Red Lake.
Coral Gold: There is some drilling as well as a strategy change that says they want to find out if they can mine the 1.5 million ounces of oxide gold that sits on surface. The stock is not priced correctly for the positive odds.
http://finance.yahoo.com/news/PC-Gold-Drills-Record-High-ccn-44453611.html?x=0&.v=1
Thanks very much for the trifecta: PC Gold has been a great performer…
I waited for someone else to ask up to now, but no one asked the obvious question, so I have to do by myself: “still not time to take partial profit?”
@Giuseppe
I sold a few, too early, and bought a few NCM who are neighbours, in fact at the rate they are going they will be neighbours to everybody.
But given this is a Trifecta, should we be rolling PC Gold in to the under-performing Coral?
ORO silver moving up today on huge volume.
From what I understand, in talking with them today, drill results coming out very soon. Let’s keep our fingers crossed it’s good news.
I do not have an opinion as to future direction on price.
It would be nice to have a junior silver prospect that I have strong confidence in to hold as a core position.
@GL
Thanks for sharing the info. I was wondering why there was a bid under it. I have my fingers crossed for good news.
This is a loaded bet. They are drilling below the mine in a district where the veins extend below the mines. A single historical hole shows mineralization does run deep. And metal ratios and vein textures indicate that El Compas could be quite high in a typical epithermal system. In the “Buchanan epithermal model”, the bonanza grades in the Zacatecas district tend to occur around the epithermal boiling point, which appears to be at some depth below El Compas. Of course the odds of hitting a bonanza vein, even if it does exist at depth, are not very high especially with the first few holes of a program, so we are looking more for geological information that helps to confirm or modify the company’s theories.
Tom — can you give guidance on the best case scenario? I am looking at profit taking target unless you feel this is a buy and hold.
We’re looking for a home run here, not a bunt single. It’s a speculative position so we want to give it some time to reach its full potential. Don’t want to give hard targets without seeing at least the first set of results but a nice 50 cent figure feels intuitively right at this juncture.
Why is managment key to investing? I met Coral mgt in Toronto, and was not impressed. Share price tells the tale.
@Bart
Coral Gold is a family run operation and they tend to get distracted, but regardless the reason for this being a pick was that they are being aggressive again both at the Avino project in Mexico and at the gold project in Nevada. I agree with their strategy to move forward with an analysis of heap leach potential of their near-surface oxide gold, even if the market has not picked up on it. The fact is that the stock is cheap, their plan is simple and easy to understand, an operation of 100,000 oz/year is not out of the question, and therefore the story is very promotable. With gold at $1,200 their properties on the Cortez trend have significant value well beyond the current market cap, which is under $15 million. Keep in mind this is the main property and trend (northern Cortez) that McEwen wanted to consolidate a few years ago. Also keep in mind as far as not being “impressed” about management that they have at least been able to maintain an extremely low share count (on the flip side this is one reason why they tend to be inactive but still there are plenty of “impressive” management teams that manage to blow a lot of shareholder money with zero to show for it). Like Oro Silver, Coral Gold might actually be in a longer endurance race than the 6 furlongs we were meaning to handicap back in February but at this juncture we believe it is worth the wait. Shares under 50 cents look to be an astute buy if you think gold is staying high or going higher.
Regarding Coral
http://finance.yahoo.com/news/Coral-Drills-5-ft-of-04891-iw-247064756.html?x=0&.v=1
Why I didn’t touch coral…
@gerininamo
Quite a silly distraction and disappointing after the prior release. No geological interpretation or even summary of total gold intercept per hole, one of the sh*ttiest press releases on drill results that I have seen in quite a bit of time. They need to concentrate on developing the near surface oxide gold resource as soon as possible, which is where the market is going to reward them. I’m going to call the company and try to make some sense of it all, it’s possible this is no longer a worthy speculation if management has lost its focus once again.
@Bart
Then why are you touching Gold Bullion Development? Now if you had been talking about Au-Ex or Fronteer, that would be one thing, those are the real deals with established legitimacy (we haven’t bought them because we saw better value elsewhere and at least in the case of FRG we have been proven wrong). If you want a company with 2 million ounce gold potential at ~$50 million market cap I would give you Richfield Ventures right now — it’s one we have discussed internally and while it too has questions about eventual deposit size, they don’t have the “unique” approach utilized by GBB (eg: exploration conducted by an outside firm, President gets paid 20 ounces of gold per month as a management fee, releasing a hard number resource potential before Ni43-101, etc).
I bought GBB for a flip. I intend to sell when free trading and ride the warrants out.
GBB.V still up 100% + from the PP, so got a little cushion for additional weakness. I do like Genivar and their experience so hoping they know where to drill.
@bart
Can’t argue with that, one thing they certainly do have going is the promotion game unlike many of the undervalued plays we seem to be attracted to (and by extension these companies appear to be undervalued in part because they can’t play the promotion game very well). Have no problem with Genivar per se, only that it is somewhat unusual to hire an outside firm to run your entire exploration program, but does make it easy to point fingers later on if things don’t work out according to the hype. Overall though I don’t mean to have such a negative tone to GBB, it clearly has some things going for it at the moment that make it look better than many of our more speculative picks. I just don’t have enough confidence in what they are doing or the property itself to warrant a speculative consideration (though the PP with warrants was clearly an attractive deal). When does it go free trading?
Aug 7th, and believe me I’m counting down everyday to get out
After further review of Coral Gold, I actually believe it is a buy here. Triplet Gulch is not even part of the existing resource but at least three of the 9 latest holes provide encouragement that it could eventually get there. The key for the project at this point will be a well-designed plan for the existing resource that minimizes capital costs (toll processing should be considered) or otherwise uses very selective mining to concentrate on higher grade, near surface areas with the best metallurgy (large crush size, good leaching characteristics). The rest of the deposit meanwhile can be viewed as a call option on higher gold prices. Looking at the Sleeper mine plan of X-Cal (being acquired by Paramount for $31 million in shares) it seems obvious that Coral’s property has some value at these gold prices.
Speaking of X-Cal you guys notice Northgate JVing the northern extension of the sleeper mine?
You guys talk to Coral mgt over the phone?
@bart
Funny you should mention, I am in the process of writing a post about the situation, Northgate has a deal not with X-Cal but Nevada Exploration (the water sniffing guys) to the north of the Sleeper but at this point it’s not an extension :>) . I am expecting a call back from the Coral metallurgist (Yasmin Lee I believe) with a few questions, haven’t spoken to Wolfin in a while. Did speak to their IR earlier. Correction to the above comment, portions of the Triplet Gulch area are in the resource model but it doesn’t cover the majority of the areas that have been drilled.
Contact Wade Hodges @ Nevada Exploration Inc. You will get a good overview of Nevada, what NGE.V is doing differently, and why someone like Northgate would partner with such a small explore co. The only person who remotely knows what they are doing is John Kaiser.
http://www.kaiserbottomfish.com/s/Excerpt.asp?ReportID=334169&_Title=Recommendation-Strategy-for-Nevada-Exploration-Inc
Have you all heard any rumors about a big shakeup this week?
http://forums.silverseek.com/showthread.php?15493-So-are-you-all-ready-for-the-bombshell-coming-out-next-week
Just looking for some confirmation from some who might be a little closer to the PM industry.
Here is an additional article:
http://uk.finance.yahoo.com/news/secret-gold-swap-has-spooked-the-market-tele-027221ec09bc.html
______________
Have you all heard any rumors about a big shakeup this week?
http://forums.silverseek.com/showthread.php?15493-So-are-you-all-ready-for-the-bombshell-coming-out-next-week
Just looking for some confirmation from some who might be a little closer to the PM industry.
Tom would consider taking a look at rubicon minerals RMX/RBY. I know you don’t like cult stocks and for a long time this one appeared overvalued but it’s fallen to the mid 3s from over $5 and the latest press releases seem pretty encouraging.
http://www.rubiconminerals.com/News/News/Details/2010/Gold-Recoveries-between-921-and-952-in-Preliminary-Metallurgical-Test-Work-from-Rubicons-F2-Gold-System-Red-Lake-Ontario11223/default.aspx
http://www.rubiconminerals.com/News/News/Details/2010/Rubicon-confirms-significant-horizontal-thickness-through-the-F2-Core-Zone-and-discovers-a-new-zone-in-the-northern-target-ar/default.aspx
As a comparison GG owns the adjacent red lake property-it’s their flagship property actually and recently bought another adjacent property from gold eagle. Rubicon’s f2 is quite similar. they haven’t defined it as well yet but have hit very high grade “bonanza” stuff and it’s still open in multiple directions as well as depth.
GG paid $1.2 billion or more for gold eagle when gold was much lower. Rubicon’s market value is $719mm and they have a lot of other properties to explore.
At one point the price may have run up in expectation of selling the property but it now appears they will develop it themselves.
A lot of infrastructure is already in place. I think they already know they have a mineable deposit that won’t require a huge capex or major permitting hurdles and will go for it by end of next year. Price is down and alongside EAS this is the real deal (for me). Just thought it might be worth a look. I started buying again based on the latest news and lower price. thanks
@thebrandts
Thanks for the comments. In the future your comments will appear immediately after posting. But everyone’s first has to be scanned for possible spam. We’ll respond to the article you linked to shortly.
@rob
For what it’s worth, Rubicon was added to our “Company Index” early last month, see: http://www.metalaugmentor.com/info.php?id=27
I’m sure Tom has additional thoughts on the subject, but generally the main thing that would keep me from opening a position in Rubicon is that there are so many good values out there right now competing for my limited funds. To allocate a share of my portfolio to a $700+ million company just doesn’t seem as appealing as buying Hathor or Terra for example. It might be something we consider adding to our Gold and Silver Portfolio, but personally I would like to see the price come down a bit. Tom and I will talk more about this one to see if we can identify any risks, drivers, etc.
We wrote a bit about NGE back in December, see: http://www.metalaugmentor.com/eforum/?p=2081#more-2081
Our conclusion was as follows:
Since that time, NGE has fallen from C$0.15 to C$0.06. The jv with Northgate is another step in the right direction, but the agreement only requires spending commitments of $4.1 million over 5 years.
The plan this year is to carry out an IP survey and some soil and water geochemical sampling to prepare for drilling in early 2011. It is hard to imagine the market getting to excited about this one for a while based on this agreement.
@zurbo
thanks Zurb look forward to it.
FWIW my impression is that they will mine themselves and not sell out-which I think is why the price has dropped almost to your buy range <3. If when PM stocks fly this will be one of the hottest. With the high grade ore, RM and a whole slew of brokers to promote it, it’s going to get a lot of attention. I think it was the brokers promoting their secondary offering with buyout rumours to get investors hopes up for a quick profit. But they wouldn’t do that would they?
@bart
The NGE story actually appears to be quite simple, they look for pathfinder elements in water wells and try to find where the water is flowing from since that might be where a buried gold deposit is located. Since most Nevada gold mines discovered to date are located within outcropping “windows” into host rocks at or near the base of range structures (hills) whereas the same rocks are known to extend under cover in the sediment filled basins, the strong suspicion is that many gold deposits that do not outcrop are awaiting discovery. Using water to find buried deposits is clever but it may turn out to be much more complex than it would appear on paper. The basins are filled to a very significant depth and any deposit found there would probably not be mined by open pit. Thus, Carlin style and other disseminated deposits are probably out of the question unless they are near the edge of a basin. Feeder, shear and vein systems are prospective but they tend to have a smaller footprint than disseminated deposits and therefore are much harder to target blind using deep drilling. The odds of finding an individual significant deposit with this method is not high, and in any case Nevada is known for its prospective gold trends containing numerous large deposits instead of isolated monster deposits. The odds of finding an entire new buried gold trend using water are even lower. Don’t get me wrong, the NGE idea appears worth pursuing and at the current price the shares are arguably very cheap especially if they don’t have to raise a lot of money because somebody else is paying for the exploration. As Zurbo stated, timing continues to be a key consideration and we should keep an eye out for when they are in the middle of exploratory work.
I don’t find these rumors to be particularly interesting or relevant. Whether or not GATA files another class action is irrelevant for the silver or gold price. CFTC position limits will impact speculators way more than commercials so that is actually bearish to PM prices.
This is a bit more interesting. It should be noted that accounting for gold swaps generally allows the swapper to maintain the gold on the books for reporting purposes and that could be a key reason for the transaction. If it were to involve a sale or lease of gold, most european central banks are signatories to an agreement that limits such activity so worries about gold being dumped on the market are probably unfounded. Furthermore, there are no commercial banks that have $15 billion in gold holdings so it is possible this gold is pass-through collateral for a prior CB-commercial bank transaction that is being monetized now. In other words, this could be an old transaction going back a while (gold leasing by central banks started in the early 1990′s if not before) that one or both counterparties wanted to “cash” out of. While possible, there is simply no way to know at this point if the affair is connected to the euro sovereign debt crisis and frankly the news is probably not that important to those of us who already understood last fall that central bank appetite for gold accumulation above $1,000+ was limited.
@rob
I like Rubicon as an exploration play and have been watching it closely. Haven’t spoken to management other than on occasion, would be interested to find out why some sort of deal with Goldcorp is not expected to be forthcoming. Perhaps they are too early along to know if they truly have a multi-million ounce deposit (doubtful). In any case, it gets tough once you are bumping up against the $1 billion market cap as an explorer or even early stage developer. Certainly in a strong gold market and with ongoing exploration success they could double from here in the short term. That said, bonanza drilling results are no longer having much impact on the share price so one should also look for other drivers. I personally like bigger risk/bigger reward in this type of market so have been focused on plays like PC Gold as well as East Asia from a gold exploration standpoint and beyond that on (what I think) are really undervalued plays with good prospects. I’ll try to take a closer look at the company at risk of missing these lower prices and report what I find.
Any talk with Coral Mgt? Continued weakness on the stock. If you guys have good things to say, sub .30 looks interesting.
@bart
Will check in again, didn’t hear from metallurgist yet. There is a clear shareholder exodus going on which would argue for this being temporary weakness. Perhaps one of the Wolfins would know what is causing it. One thing that might have happened is that Paramount was looking for a Nevada buyout (first tried Klondex, then X-Cal) so perhaps they or somebody who knew discussions were ongoing may have accumulated Coral Gold and now that Paramount has done a deal with X-Cal they are selling the Coral shares. Total speculation but generally fits the pattern.
What do you think about Oro silver down here. Wondering if it will just limp/drift lower, or are we closer to a bottom & a good place to lower our average price ? Thanks
It’s cheap, yes could still go lower but “buy low sell high” does actually require buying low so I would say careful accumulation at these levels should be rewarded in the months ahead assuming of course that juniors get a renewed bid. Larger gains are probably further out. Generally I don’t like to take a big additional position purely because the price is cheaper and would prefer some company headway or progress for hint of light at the end of tunnel. That said, the shares are declining to a point where averaging down and increasing our investment time horizon even further out could start making sense. As I did note in an earlier post this is going to be a longer term speculation so buying will involve more patience than what’s needed in the typical horse race. In conclusion, if you have a small position it would probably make sense to average down here but only if you are willing to hold for a longer term (1 year or more). If you have a larger position and will still have a good amount of cash after buying, it could make sense to add a bit to lower the average cost but I wouldn’t do it with the expectation of a substantial return in the short term. Finally, keep in mind this is a highly speculative play so it should be balanced with safer and more defensive positions in the rest of your portfolio. I’d probably throw these considerations out the window and be more willing to back up the truck if we got down into the 6 cent range.
@silverax
Is the management at ORO on the ball in trying to help the company move forward?
I talked with investor relations a few weeks ago and it was stated some things? are being lined up.
We shall see. Obviously those of us that purchased ORO at much higher prices are frustrated, but that’s the junior world we’re operating in, and not every choice is going to respond in the time frame we demand of it.
Indeed, patience with this little guy is necessary with the hope management has the ability to make wise decisions.
Thanks for the update.
And thanks much for the awesome new silver report… it’s superb work you and your team should be very proud of.
@GL
ORO was certainly a dissappointment. They did put out a PR on 7/12 about new drilling targets, if that means anything.
http://www.orosilver.com/main/?pressReleases&newsidnew=100&PHPSESSID=4ac0350fc9ef452e6cd05e65736504b2
I’m going to hold on, maybe average down and hope it pays off. No other choice really.
@GL
Thanks GL, the management could be more aggressive especially in their Zacatecas district strategy that potentially involves acquiring more properties. They do appear to be putting together an aggressive follow up exploration program but it is not providing enough of a forward view for shareholders to stay very interested right now. I didn’t like that they are not providing a general timeline for the next phase of exploration in their press release, it gives the sense of things being in limbo. At minimum I would like them to hurry up and put out a new resource along with a detailed plan showing where the deposit is open for further expansion. Although the resource is still going to be rather small, it is near surface and obviously quite high grade in places next to existing mine workings so it could potentially be mined quite cheap once they get enough tonnage drilled. Another concern is that they will need to raise money sometime soon. So yes, they do need to be working on some things “being lined up”. Alas the timing in this market is a serious concern especially if the juniors fail to attract new risk capital in the months ahead.
@rob
You have other choices, it is obviously a speculative position so averaging down may not be the best strategy. The potential for big rewards includes big risk so you have to be willing to take losses when the disappointment is significant enough that all you have left is hope. That said, in my view the prospective nature of the property has not been diminished by the recent results, rather the potential discovery time line has been extended (unfortunately by an unknown amount at this point because the company has not fully worked out its future plans).
PKL may (or has?) run. Otto vs Lebed http://incakolanews.blogspot.com/2010/12/is-this-most-stupid-mining-analysis-of.html?utm_source=twitterfeed&utm_medium=twitter
@Dave
Now I understand the reason for such a sudden rise on no news!
I always asked myself why pump&dump-ers never choose really undervalued companies to pump, this time it could be the exception.
The EV per PREVIOUSLY produced ounce of gold seems a very clever way to value companies, maybe Jonathan Lebed is not a pumper, he is a serious analyst, isn’t he?
Lebed has been doing some more pumping of PKL this weekend, so there could be decent follow-through on Monday. We added to a little to our position in the 60s so if the move is significant enough we might start think about taking some short term profits.
@silverax
Would you consider now to be good timing. Northgate should be drilling by now, and the US Gold deal may lead to some surprises too… not so sure about Gravitas though….
@bart
I presume you are talking about Nevada Explorations/NGE? Seems cheap but I am still not convinced the problem of finding more gold deposits in Nevada has to do with pediment/burial under basin sediments. As I mentioned in another comment recently, structural preparation at the edge of the basin topography may in fact be very closely related to the formation of major gold deposits. That doesn’t mean there might not be deposits found off the edge of the range (and in fact there are some of those) but I think it does mean that something like what NGE is trying to do will take lots of patience and many failures before there might be a payoff — perhaps integrating it into other exploration methods would be more useful instead of having the method be used as the primary identification? I don’t know but it seems like they have plenty of work ahead.
@silverax Sorry about that, yes I was referring to NGE.