It is a standard clause in any of these contracts. Can you give me any examples where companies terminate a deal on a synergistic property that is many standard deviations in grade better than their current production properties (especially if it only takes a relatively token amount to maintain)? If you could provide two or three examples that didn't involve the senior partner going BK I'd be surprised. The only way the contract lapses is if AR does preliminary exploration that literally contradicts every single piece of evidence and data from the company and 3rd party sources produced over many years. That is highly unlikely, we're talking an elaborate conspiracy and fraud much worse than Bre-x, which is basically a completely ridiculous comparison to make.
I know there are lots of folks waiting for sub penny. You people might be waiting a while for something that never happens. I know lots of people with the same aspiration. I noticed that when an idea is very common it is usually best to take a contrarian position.
You guys are basically saying "I don't care if miners have never been cheaper before in human history, I'll wait until it drops to an even more absurd extreme!" I heard the same kind of stuff every time I have successfully called a bottom. "99% off - what a terrible deal! They might have a 99.1% sale tomorrow!" And then that tune shifts to "I don't have any shares but I'll just wait or buy some when the stock prices rise, that means they are good." Even with the net and free information humans still follow textbook market psychology.
You guys are looking at a spotless Lamborghini for sale for a dollar and are complaining about the price. Yes, you might be able to buy it later for 50 cents but that doesn't change the fact that it was an amazing deal at $1.
In investing fear and greed prevent us from timing the markets appropriately and getting the exact bottoms and tops. I'd do a gut check and look out the window, the bottom is in sight, or at the very least we are much closer to a bottom than a top. Exact timing is basically impossible.
Some predictions:
There is a 100% chance AR options the Julio property into 2016.
There is a 100% chance there is at least a million ounce economic gold deposit on Mexus/AR properties.
There is a 95%+ chance that AR's drills will be impressive.
There is a 75% chance these objectively impressive results would translate into a higher stock price. Good results should signal to the market beyond the shadow of a reasonable doubt that AR will develop the property. But the junior market has muted reactions to good news at the moment. Eventually good news and progress trump expectations.
Mexus will never trade a material number of shares below a penny, if at all.
At this point all the gold is valued at around zero. To go much beyond that bears have to argue that the economic gold will be worth zero or less than zero and I have a very hard time with this rationale. This is bear market bottom activity and reasoning. It is absurdly cheap, so therefore it must get cheaper? No, at some point a critical level of undervaluation will be reached, M and A will begin to replace mined minerals and a new bull will begin, fueled by the sector decline and curtailment of production along with the forces of supply and demand.
At some point the mining sector will turn as it always does and when it does those $0 ounces will trade at a premium instead of some sort of bizarre penalty. We will inevitably swing from extreme undervaluation to extreme overvaluation. I'll be buying in the former and selling in the latter and at this point the deals are so good I will not quibble about price.
