$EXS...TIED TO GOLD...
It has been suggested that the market value of a public mining company is what ‘The Market’ says it is. In other words, the .035CDN stock price of Explor Resources Inc. indicates the market value of the company, fully diluted, is roughly CDN$7,700,000. Looking at Page 35 of the most recent MD&A document available at www.sedar.com, the combined value of the company’s various property assets is CDN$35,536,838, representing fair market value. Obviously, we have a serious disconnect between the two numbers. All things being equal, on the basis of real assets alone, Explor should trade in the .22CDN neighbourhood, roughly SIX times the current price. So, why is the trading level so low??
First, and foremost, is the price of GOLD, which peaked at USD$1,900/ounce in 2011. Since then, we have seen a significant decline to the USD$1,000-1,380 neighbourhood; a recent downtrend to USD$1,225, & continued price uncertainty moving forward. Secondly, as the GOLD price peaked, so did the Toronto Venture Exchange, reaching a staggering 2,440points on a massive peak volume of 946,560,000 shares in March, 2011. Today, the exchange is at 712points, on a meager volume of 144,819,000 shares, representing 15% of the 2011 high, and a cumulative loss of 1,728points. https://web.tmxmoney.com/quote.php?qm_symbol=^JX&locale=en
Now, if you overlay the EXS/EXSFF/E1H1 chart to the GOLD chart, and the TSX Venture chart, they are virtually identical. The logical conclusion is investor interest in Mining Exploration ebbs and flows with the price of GOLD in USD. Look at any mining exploration company’s chart over the past ten years, and other than the occasional anomaly, they are all pretty similar.
Having been in the Mining markets for a very long time, I’ve experienced this situation a number of times before. For whatever variety of reasons, as was the case in 2011, I strongly believe the commodities markets, and GOLD specifically, will peak again. Good mining explorers, including Explor, and their investors, will realize life changing gains when that occurs. Just go back to 2010-2011 to bear that out , as EXS/EXSFF/E1H1 climbed to $1.40.
The march towards production at Explor’s Timmins Porcupine West GOLD Deposit Central Pit is ongoing. I visited with President & CEO Chris Dupont last week. He gave me some seasoned insight into the process of finding the financial support for this project. Its complicated, detailed, and requires the patience of God. There is no end to Chris’ perseverance, so I’m totally convinced the funding will, eventually, fall into place. Although he could not mention specific names, he did volunteer that he is working with various, credible, and experienced sources, all of whom are deeply familiar with GOLD mining. In conjunction with the project, he’s in Sudbury this week for discussions with suppliers, and meetings with major investors in the area.
Further, during my visit with Dupont, I also drove out to the Chester Copper Deposit with the project’s chief geologist, a very old & dear friend of mine. The property itself is huge, but honeycombed with countless logging roads, providing access to all parts of the landscape. He showed me the various drill sites dating back to previous property owners, along with his excited commentary about the individual findings in each hole. We located, and discussed, some 50 drillings to maximum depths of 600meters. I also saw the existing portal into the deposit. It’s basically a corrugated steel cylinder some 30feet in diameter, sloping downward at about 15degrees. Apparently, around 100meters in, it forms a ‘T’ and carries on in either direction for some distance. I would be more specific, but the portal needs to be dewatered to gain full access. After scrounging around the portal for a while, I came away with two high grade copper samples to show to friends, and family invested in the stock. As commodities recover, I’m sure more work will be done to further delineate that resource.