Ursusbrumae thoughts. Nice analysis and especially the conclusion:
"there are now twelve drills turning up at Kakula. So in two months we have gone from 5 rigs to 12. Think they might be finding some more copper up there???????????"
ursusbrumae
February 14, 2017 - 08:06 AM 185 Reads
Post# 25841386
RE:BMO RAISES TO $7 AFTER ANALYST SITE VISIT
Interesting. It reads like very tentative praise, as if they are going from total incredulity to admission that, yes, this is a legitimate mining company, in a tenable position...for now. And they are admitting what I and a few others have always said, which is that "political risk" is just a nonsense phrase people repeat mindlessly, and if you actually break it down and define precisely what it means, it's not really very threatening, because it's not based on any high-frequency or high-severity event (in insurance parlance) in either ownership or operations, or at least not one of higher frequency or severity than anywhere else in the world.
Now, whatever valuation criteria they are using (they say NPV10, but is that discounted to a percentage of NPV10 based on phase of development, as many investment banks do?) to arrive at 7 dollars, must be highly conservative, or perhaps reverse engineered so they can just slap a standard 40% premium to market on their price target, which says, we like you and we're open for investment banking business, without saying, we are wildly bullish on this stock (which, in my opinion, is the only rational position in view of the relevant and available facts) because flying outside the herd has no utility to a sell-side analyst or a brokerage firm. It's fair enough as a very conservative report, with mostly astute and true statements. But there certainly is no mention of the fact that the Kakula discovery is essentially unparallelled by anything anywere for many many decades, or for as long as living memory serves, and that the other three assets are also pretty much unmatched. And they are sort of saying that they like the fact that Kakula is open, without recognising that 40% of Kakula alone is worth double digits TODAY, even before the resource update from already-announced drill results.
The only piece of new information here is: there are now twelve drills turning up at Kakula. So in two months we have gone from 5 rigs to 12. Think they might be finding some more copper up there???????????
