Warren Buffet would never buy lode since he is a value investor and lode is not undervalued based on traditional methods. Even if it had a P/E of 1 and paid a dividend he probably still wouldn't buy it because mining "investments" do not follow a Ben Graham style of security analysis. Over the years I have found parallels between what Graham and Buffet did/do and what we are trying to with juniors and mining companies but they are still very different beasts. Buffet = an investor who buys undervalued cash generating businesses with an expectation that most of his gains will come from business income and from dividends rather than capital gains. CMI shareholders = speculators who are hoping the gold price goes up enough that CMI can make a profit and therefore receive a small value per oz discovered and reinvest and grow the company into what is hopefully a gold bull. Almost a 100% of the expected gains will be capital gains instead of dividend income. An investor never uses the word hope, but speculators do all the time, and CMI holders probably more than most.
And please no comments about Buffet buying silver in the 90s - that's not investing either since bullion returns an average yield of 0%, regardless of how cheap it was at the time. I studied all of Buffet's history and his family story is very interesting when it comes to gold, his father, and his current attitudes towards it. In my opinion Buffet is an investor who is not completely honest but one who rarely speculates.
Lode is fairly priced based on the fact they still lose money on every single ounce in year three of mining. Even if we priced lode at a hundred million times profits it still has a negative value. Lode could have a billion ounces of gold and discover a billion more but multiplied by zero (ie because they have proven it cannot be profitably extracted) this does not help shareholders.
Every day we spend at these low share prices will mean extra dilution and more of shareholders upside being stolen from them. Even if lode achieves a massive market cap when gold returns to favour there is a high chance many shareholders will not profit. One thing can be guaranteed - Winfield will profit and Corrado will get his exorbitant paycheck and bonuses for "creating shareholder value."
Also ANV, the stock I compared lode to for years as a potentially hugely advanced CMI, has gone bankrupt. The company had lots of debt and problems but they couldn't profitable extract basically the same stuff as CMI either even with more advantages. Lode may yet be a goldmine or a minefield. Or both.
That's the truth as I see it.
Take care, it's dangerous out there!
