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Excellent post, Tomberry.
The difficulties with EXSFF are no different than 95% of all of the other junior mining deals out there. The problem in this forum is that most of the people that moderate the content in here are long the deal from MUCH higher levels and have been reluctant to allow any dissent or "Cautious Content" to surface.
As for the CEO, you just KNEW that when PB posted that he was attending a promo-meeting in California a couple of weeks ago that things could not have been going very well. Every single time that the CEO addresses a large group of prospective investors, they walk away wondering why they own the stock and that doesn't breed much buying pressure. Same thing occurred during the webcast a few months back. Everyone was expecting a big drill hole (big front-running the day before) and all they actually got was a (negative) surprise financing comment.
There is no one better in field execution than CD but to coin a phrase, he couldn't sell hookers on a troop transport.
Not every investor has the same degree of patience as an analyst or other investors and in this case the "impatient" investors were correct in their judgements. Those that were "patient" are now afforded the opportunity to buy three or four times as much stock as they could four months ago. Goldcorp traded at $51 on March 1 - it's now $33.78 - so I guess the "impatient" sellers in March were stupid and didn't practice what every analyst was preaching back then (See RBC/Scotia/Canaccord reports) and are now afforded an opportunity to accumulate Goldcorp 33% lower in 10 weeks. That is what happens when you run into a really ugly and "smelly" market.
Superb results in an absolutely garbage market...looks like EXSFF just went from a Strong BUY to a LONG-TERM ACCUMULATE. You have to ask yourselves what the action in the metals markets is telling us...why were they clamouring to own juniors in 2007 at TSXV 3370 with gold at $800 and are now throwing them under the bus at TSXV 1,285 with gold at $1,550? Smells of a massive deflationary blow-off.
What? It ISN'T about Explor?
No I won't give examples as I own them and it would be a) pumping other deals on this board; b) off topic; and c)shameless cheerleading for my own self-interest.
"These mining shares are so cheap, Eric."
Same story since March...and they just keep getting cheaper and cheaper and cheaper....
EXSFF has a lot of competition out there for bids - there are deals out there fully-funded with 2m ounces inferred with $5m cash trading at the same market cap as we are. So no surprise, no surprise...160mm share o/s is a lot of paper to move.
I am a BUYER after listening to Joe Martin!!!
This is a MUST-LISTEN-TO!!! (Please do not delete!)
"The Gemcom database for this estimate was constructed from 199 surface drill-holes, of which
106 were utilized in the resource calculation. All remaining data were not in the area that was
modelled for the resource estimate. The drill-hole metadata are listed in Table 18, and a drillhole
plan map is shown in Figure 10."
From PAGE 57 OF THE 43-101
EXSFF remains a terrific opportunity at current levela, IMHO.
Important to remember that incorporated into the 43-101 data was "historical data". Over 100 holes were drilled by predecessor owners of his claim representing $20mm of work and which comprised "historical data". In other words, the "ounces" that are currently 43-101 compliant are derived from 200 holes, not 90 as stated. However, the stock is dirt cheap and should be bought because in time, there will be over ten million ounces confirmed. Who owns those ounces is the $60 billion question.
Guess how many presentations DuPont has made in the past week to qualified junior mining investors in the U.S. ???
Yes PB - those of us that were there in the Crash of 2008 were able to pick up shares at $.10 and you were one of them! A lot of us have free shares but and if we sold some while still being positive, it was simply proper portfolio management. Those that cheerlead the deal at $.50-.70 and got bagged (and bagged others by cheerleading) would rather point fingers and play the "blame game" but in the end, PB was there in the crash and had the cohones to "step up" (as did I) so we have very little "explaining to do" especially when we are all shareholders hopeful of a positive outcome.
Destinator - the stock is down enormously - Tomberry is not without duly-deserved angst regarding the current Explor malaise. I think his posts in here are legitimate expressions of concern. Had the content in this forum been less cheerleader-ish back during the pumpadoodle of the Webcall, and more realistic in addressing valuation and dilution, then Tomberry might not be so bagged now.
Fortunately, EXSFF is now in a zone where it can be safely acquired so the risk is now mitigated. There is no crime in being a shareholder and critical at the same time.
Perhaps Mr. McCoach HAS been advised of many, many issues pertaining to Explor over the past three years. They talk every other day. That is why Greg's #4 pick is where it is...
"You are always focusing on the worst case scenarios"
Actually I am not - I am focusing on the simple math that is available in the audited financials for EXSFF over the past four years. The company will be spending money to establish those resources, will they not? I estimate that they will have spent their current working capital either prior to, concurrent with, or subsequent to the establishment of the new resource number(s).
If these markets heal up, hot money may gravitate back to these issues and the stock might pop and allow a really advantageous pricing on the next raise. If they don't, then you have to adjust.
Beats talking about a BNN interview with a driller that was rumoured to have "seen the core" and is "buying the stock" so as to prevent the people in this room from blowing off their stock.
In your best judgement, what outcomes could occur with EXS if the company proves up 1.5 to 2.0 million oz and runs out of money? Does EXS continue to issue more shares and continue drilling? Do you have any insight into what occurred with the CA agreement that was signed that we never hear anything about?
Firstly, the expense associated with the establishment of "1.5 to 2.0 million oz" virtually guarantees that they will "run out of money" or more appropriately, will be required to come back to the public market for additional capital. Dupont is acutely aware of the burn rate and will be back to the trough long before the funds are expended. On a positive note, the investors in the last financing will be forced to protect their investment by continuing to invest in Explor and that is good. However, it also guarantees further dilution so where the rubber meets the road is in the pricing of that next financing. If markets are bubbling, and EXSFF can do another round north of $.50, and adds another 20m units (30m with warrants) then the undiluted capital is at 168m with the f.d. capital at 207mm. And that will then required an even great number of ounces than "1.5 to 2.0 million oz" to justify the price.
As for Agnico, it is really quite simple. Majors do not act quickly; they are tortoises. However, you can rest assured that they have every imaginable piece of data pertaining to Timmins P. West and as of this date, are NOT joint-ventured with EXSFF. The danger of a CA when everyone knows about it is that if time goes on and nothing happens, the market perceives it as negative because "they didn't like what the CA allowed them to see" (which is actually BS) but nonetheless the reality.
The stock is now priced as a "dead money" investment; this is usually an decent entry point. The risks remain that your assumption of the ounces that are coming actually do materialize and that the market can live with the share structure.
Hope this answers your queries, Tom.
If I posted that Newmont Mining was going to be appearing on CNBC to discuss their 2012 outlook and it was important because they were rumoured to be interested in Explor, would that be construed as a bullish or bearish comment? My sincere apologies to the Board as I was simply highlighting what appeared to be a blatant inference that Agnico is an EXS "suitor". They are NOT. And neither is Newmont, I should add...
Desti - and just HOW is Sean Boyd's appearance bullish for Explor?
The Explor share price is down for one reason:
http://www.gotgoldreport.com/2012/04/the-mining-share-gods-must-be-crazy.html
That chart says it all...
The section on "The Juniors" is great...
http://www.sprottmoney.com/news/rick-rule-why-im-excited-about-this-market-casey-research
If the group trying to get control is sitting on 100 million shares of prospective buying, I would pop a champagne cork and do an Irish jig.
Interesting approach but it could be dangerous if the stock suddenly takes off. If what you say is true then would it not be safer to put it up for sale at say $15.00 instead?
OK - $15 per share times 187,500,000 = $2.8 billion.
At $100 per ounce, that would imply 28,125,000 ounces of gold.
It took EXS $10mm to confirm 800,000 ounces so to drill off 28,125,000 ounces would entail 30 times $10mm or $300mm of exploration dollars.
Question: How many shares of dilution will be required in order to finance that endeavour?
Comment: I see a more realistic approach that would involve doing a deal with a major when they get to 1,500,000 ounces.
At a 30% free-carry, $5.00 per share would be an easier task ex-dilution if they can get to 1,500,000.
Interesting:
$26.8mm (undiluted capital) / 800,000 ozs. = $33.50 per ounce
$32.8mm (fully-diluted market cap) / 800,000 ozs. = $41 per ounce
Mega Precious Metals (MGP.V) is trading at a $37mm market cap on 1,500,000 ounces in the Red Lake Camp.
$37mm (fully-diluted) / 1,500,000 ozs. = $24.66 per ounce
This is how the bigger institutions value junior developers so that is a far cry from the $68.00 per ounce that we traded at when the financing was announced at $.40.
What has happened is that this lousy market has taken away the "Blue-sky" premium that was being assigned to the "next Hollinger-McIntyre-Conorarium Complex" leaving only the in situ valuation metric.
Important: The value-per-ounce universe is down from over $100 in Feb 2011 so that tells you how "challenged" this market is...If you believe the junior gold markets close to a turn (in terms of per ounce valuation), this is where you start throwing in some bids.
Who are "they"?
"Once they inflict the investor fatigue on a sufficient number of shareholders they will take this company over for a song instead of what it is worth."
There are zero bids in the Explor market today. how can the company generate investor interest? What is going to be the catalyst for a higher near-term price?
I give up...anyone have any questions regarding the geology, i'll try to help. Any questions about the share price being massaged as part of a larger conspiracy, ask Destinator.
Destinator - why are you pointing fingers now instead of discussing the outlook for Explor? Let us keep this discussion "on task" and talk about how improvements could be made to enhance shareholder value. Pumping the deal obviously didn't work. Perhaps non-promotional valuation analysis might be helpful. Just a thought.
Maybe three new Chief Promotional Officers along with a little robot on wheels - that would be 3CPO and R2D2 ...
I also urge people to "Get Smart" in their expectations surrounding a possible deposit that may lurk over half a mile below the earth's surface that has yet to be identified. We know the lair where the beast "should" be, but will it still be there? These are the questions that need to be answered. Will a $7mm treasury be enough to ignite the interest that is required to lift 187,500,000 shares of stock? Those that can only see a 30-60mm ounce mine with billions in cash flow are ignoring the immense amount of work required in that journey. These doubts are the source of the selling pressure as well as the horrid technical action (in all juniors) and the current pall over this space. In 2008, I watched the stock rocket to $.90 from $.30 in six trading days on 40-feet of half-ounce at Eastford only to have the SubPrime Meltdown stake it straight to a dime by Xmas. It made no sense but because of redemptions or fear or stupidity, someone sold me shares at $.09 in December 2008 and I sure as hell didn't blame manipulators for that crash. To say that the current weakness is "ALL MANIPULATION" is like the anorexic 90-lb. lady looking in the mirror and seeing only fat. Of course, it is easier to blame manipulators than to admit error in either timing or valuation or both but here we are at a 3-year low and there are no bids to be found anywhere. Such are the cruelties of the junior mining market.
I see a 90% chance that there will be gold-bearing mineralization in the north limb. Will this stratigraphic hole be economic grade and width? There is a 10% chance of that because drilling to hit quartz veins in the Abitibi has a history of 1-in-10 odds. The Dome Mine was a good example of that because these types of deposits are heterogeneous beasts. I am not speaking out of desperation here. Been in the name a long time and just want accurate data flow to unfold. The days of cheerleading are over and done. It is now show time because financings are being cancelled left right and centre as the mutual funds and hedge funds are being redeemed in size. That last financing sucked but EXSFF got the money and that was a veiled blessing. Now we need the markets to heal up so new capital will flow back into the juniors. If they stay in this funk, the risk rises with every nickel they spend trying to prove up 2mm ounces that no one will give a s7it about. Then they will be out of dough and financing again at $.15. Hope not, THINK not, but aware of the risks I certainly am.
Mirror?
Just look at the south and north limbs of the Pearl Lake porphyry - the south limb became the Hollinger Mine at 19.3mm ounces while the north limb became the McIntytre at 10.8mm ounces. The discrepancy in ounces "mirrors" what Destinator just posted. This geological discussion in here is irrelevant. You can speculate all you want on "theory" but until you get underground, it's all guesswork because it is a VEIN system, just like the HMC.
The secret to advancing the price is 1. markets must heal 2. the market value per ounce of gold for the junior developers must improve (i.e. sentiment) and 3. EXS has to demonstrate that this TPW project has TENS OF MILLIONS of ounces, not just 2 or 3 million.
North limb, South Limb, Syncline all blah blah blah until some major decides to walk in and write the check for someone - ANYONE - in the West Timmins camp. However, I think the stock is cheap now but the target price remains a mystery to me...
Odds of being successful for this stratigraphic hole?
Geologically and/or technically? I give it a 90% probability of being successful.
Your question really means: "What are the chances that it will make the stock go up or will it be "successful" in a share-accretive manner?"
I give it a 50-50 chance of making the stock price go up unless it kicks a major in the arse and makes them chase a JV or a direct investment in EXSFF.
Without a deep-pocketed sugar daddy, the markets might fear the financial burden associated with establishing a 3mm ounce M&I resource.
Very little technical risk but possibly hampered by the fear of financial risk (more dilution).
Whatever the outcome, it is a ballsy move by Dupont and that is what I have always admired about the entire deal.
Stratigraphy is a branch of geology which studies rock layers and layering (stratification). It is primarily used in the study of sedimentary and layered volcanic rocks. Stratigraphy includes two related subfields: lithologic stratigraphy or lithostratigraphy, and biologic stratigraphy or biostratigraphy.
This pertains to the definition and delineation of the structure referred to as the "syncline".
It will be a significant intercept if successful in that it will cement the HMC Model forever.
No they cannot - you can gauge the content of the pyrite in %age terms - 30% fgp (fine-grained pyrite) will usually be a good sign but can also be barren while v.g. (visible gold) can look sensational and comeback sub-economic. In the case of EXS, if the core contains mineralization similar to previously-assayed core, complete with the banding and quartz-veining, it should be a positive outcome.
Great press release this morning! The drilling of the North Limb was a strategic necessity and was discussed late last year and was (apparently) agreed upon in the Minutes of the late-2011 Board Meeting in Rouyn. If successful, it would double the impact of all of the drilling to date. The "shadow effect" of the north limb would certainly build speculative appeal to the TPW story. It is all good.
No Destinator - you did not "imply" - you said it was the fault of 1. manipulation and 2. a "fox" that said "BUY" when in fact he/she was SELLING. Even if it was Eric Sprott saying BUY, it wouldn't prevent one of his portfolio managers SELLING if he had redemptions. Even if a broker was advocating BUY, it does not stop his clients from SELLING, now, does it? If my accountant says "Use hookers as a business expense!" and I decide not to, that is MY DECISION. You are great at blaming everyone else for the shit-kicking because it is the easiest cop-out for you. Why don't you focus on the bigger picture and the positives rather than the "Conspiracy" that you claim was targeting you and only you.
How does Greg feel when PAA withdraws from a JV with his #1 pick Orko and it tanks 70% in five trading days? I don't see him blaming PAA for "conspiring" to crater Orko. PAA was touting La Presiosa as the next best thing a few weeks before they left the chicken coup and then they did what? They made a decision and they terminated their JV and OK shareholders got screwed. Was THAT a "conspiracy"? Conditions CHANGED - period. And neither Greg nor PAA are "hiding behind the market".
Thank you, Tom. The junior markets will turn within a couple of weeks if it follows the 2009 scenario. Sentiment at the same levels; TSXV/Gold the same; GDXJ/Gold the same; market vane at screaming buy levels; and people in chatrooms pointing fingers and whining...sure feels like a bottom in sight to me.
ELCARIBES - Read my post again - I do not blame ANY ONE entity for the decline in the share price - it is a function of the market and the collective judgement of the market has been that Explor was over valued in the $.40-.80 range and has since re-valued it.
MDO ran over 100 stories on EXSFF since 2010 so they certainly provided EXCELLENT coverage and due diligence material. No criticism of MDO here, friend.
On points 8,9, and 10, how is that a reason for the share price to be lower because they have nothing to do with valuation.
Let's go through the numbers. EXS has 800,000 ozs. of Au - with the JUNIOR MARKET IN SHAMBLES, the investment community is assigning $30 per oz. which is $24,000,000 so on a fully-diluted basis (187,500,000 shares) that works out to $.128 per share. Let's assign $60 per ounce in a BETTER MARKET so that gives us $.256 per share and then throw in another $.05 for the other properties. You now have $.306 for the upside target. So now assume that every dime spent in exploration results in additions to the 43-101 compliant resource and EXSFF nails 1,500,000 ozs by Year-end. Assume 45m market cap ($30/oz) or $.24 per share plus another nickel for the other properties OR assuming a BETTER MARKET - repeat - BETTER MARKET - and you get $.53 per share. Now if you start nailing the hinge point and the widths and grade start really ramping up, perhaps the share premium for "blue-sky potential" improves and you get $100 per ounce valuation and you could make a case for $150m market cap or $.802 per share.
So you see, as a shareholder, I can see the upside very clearly. What I can't see (and won't acknowledge) is that Dupont is to blame or that McCoach is to blame or Market Digest is to blame or the underwriters are to blame. I also own a few more juniors that are suffering as well but the blame lies with the Junior Mining market - period. When the juniors turn, investors will turn to large potential, low CAPEX, well-managed deals that are close to production and that will NOT NEED FINANCING in this current environment. AND, in the gold developmental space, they will look for the low market cap per ounce stories first and with EXSFF's CURRENT - not potential - CURRENT $44 per ounce number, it resides 50% higher than comparable companies out there. Maybe that could go down as "Point 11" when you get back to valuation rather than finger-pointing.
Re: Expert Opinion Poll
Two additional options to consider:
6. Transformation from exploration to "developmental" junior ("blue-sky premium" eliminated from the valuation metric)
7. Dilution (issuance of 50m additional shares since last Autumn)(plus additional Directors' "incentive" options)
(The first six "reasons" are invalid)