Mexus Gold US (MXSG)

[TMLonggun]

Mexus Gold Speculation Theory

When you speculate you are making an informed bet. I personally ask myself a series of questions essentially forming a mental equation in my mind. Everyone should do their own dd and make their own appraisals.

I ask myself why should I buy shares or hold the ones I have? Are there compelling reasons to speculate? Why am I here?

Because of Paul Thompson. I personally trust him. Overall one has to decide, has he missed his mark, or, is he an honest entrepreneur who will do his best to do right by his backers? He has been given a lot of flak over the deals that have never materialized, some deserved. But should he have accepted an unfair deal that jilted shareholders for short term gain? Of course not. Ask yourselves could you have done any better in this market? I think PT's performance is well above the sector average but the bar is pretty low at the moment, the majority of companies are just trying to survive. But when the bar is so low it is easy to raise it, just like the expectations for the mining sector - people expect nothing at this point. Giving them something will cause the pom poms to come out.

Because of Don Philips. Make of him what you will but one does not pick what essentially amounts to successive lottery tickets by luck. His endorsement is a strong positive. How many of us would have even heard of Mexus without him? How many opportunities have there been to make vast sums of money off not only his previous picks but also even Mexus itself? There have been numerous chances to make vast sums but not many of us have managed it but Don has.

Because of the quality of Mexus gold properties. Simple question, do you believe there is a large amount of economic gold on the property? Do you think there is a decent or high likelihood that Mexus could drill a large, high-grade discovery with relative ease?

Because of the macro environment. We live in a world where high grade gold deposits are becoming increasing rare and the global average is about half a gram per tonne for undeveloped deposits. The majors care little for acquisitions at the moment but in a couple of years they will have eaten their lunch and have hungry bellies and go hunting to replace what they have consumed. In the future it is highly likely the properties alone will be worth a fortune even without any production factored in whatsoever.

Because of there is a small chance of a buyout and high chance of other JV opportunities over the years. The property is large and the gold mineralization appears to be extensive. The expansion opportunities and chances to explore other areas and claims are numerous. Mexus has other exciting properties and there is a decent chance there is something valuable on those too.

Because of the potential of additional huge upside if gold appreciates.

Because of the potential for huge cash-flow. It is quite reasonable to see expansion to six figure gold production over time, with long LOM, and obvious world class mine potential. A simple heap leech operation supplemented by the underground and whatever exploration leads us to discover it is pretty easy to imagine some pleasant BOE math.

Because of the potential for eventual dividend yields that are absurd. They have to make money first of course, but initial GORO investors no doubt fantasized about dividends to come, and they got $104 million! So it is possible.

Because of where we sit in the mine cycle, at cyclical lows that have persisted for about the length of previous declines; with profitable companies now being rewarded for news and progress it demonstrates a dramatic change.

Because of the example set by numerous profitable mines in the same trend as Mexus, all are profitable yet have demonstrably inferior projects when compared to Mexus. Does this not make them more likely to succeed?

Because a financed Mexus with only the shaft producing is worth multiples of our current market cap.

Because you do yourself an immense disservice by not averaging down or purchasing precisely when an optimal opportunity presents itself. It sucks if you bought high and sold low in the past but how does ignoring a good chance to do the opposite enhance your psyche or well being?

Because the stock is cheap. It can still get much cheaper and potentially go lower, but on a simple relative value basis Mexus at under 2 cents is cheap and undervalued and meanwhile everyone is sad :( while Mexus at 62 cents was overvalued and expensive (everyone was happy). How much more likely is Mexus to run from .016 to 8 cents than from 62 cents to a dollar?

Because of the entertainment value. At five a dime, more than worth the price of admission IMO.

Because of the crazy ass shareholder base. Subtracting the weak hands who will quickly sell out there are still a lot of, uh, I will politely call them, nuts, who hold the majority of the float and do so with a long term outlook. I think at least 150 M shares "know" it is undervalued. The float could be much smaller than expected and if ~200 million shares are held close very little demand will drive the price higher (if there is a fundamental reason). Just as easily we fell to .02 we can rise to .20. Even with all the extra dilution of life support, necessary in a bear market for most juniors regardless of a CEO's acumen we still are in decent shape. It sucks they print shares but we will live to fight another day and to do so allows a very good chance of reclaiming our old highs. Even 50 cents is ~31x our current share price. If you had a 31 bagger you would be hailed as a genius stock picker and many would frame the certs on their wall. There's a pretty fair chance that happens in my mind so all this depression is a bit comical. Stocks go up and down and it is partially because of how emotional we are.

What percentage chance of success does this all amount to? That is something you should decide for yourself. I would make the argument that even if you placed a 5% probability of Mexus succeeding that would more than warrant a purchase at these prices, since the upside is frankly astronomical. We have recently experienced lots of downside and so our perspectives are coloured by our immediate pasts. Rationally I do not think our chances of success have dipped much since the whole SF saga punched our negotiating clout in the groin. The chance of winning here is still far greater than 1/20 in my opinion.

So have a laugh everyone and relax, this time is like a blip on the decade long timeline of getting a mine into commercial production. We're still ahead of a normal timetable and most of the facts speak to an impressive property that will be worth far more in good times than in bad. The gold has been there millions of years and it isn't going anywhere until Mexus mines it.

Here's some wisdom from Rick Rule:

note the story about Paladin Resources about 13 minutes in.

Here at Mexus either the longs are right or wrong but this puzzle has already been assembled for anyone to see. We are just missing the one, very critical ingredient, the financing. We still need some doubloons to get us started before we start minting our own.

So ask yourself, will financing come? And what will that do for the company?