Say there are five or six relevant points to a discussion. A fair presentation would be to touch on all of them. On this board there are two polarized sides that ignore important evidence. They just pick the elements that support their position and ignore the rest.
Despite criticizing longs for having x-ray vision, we have several self proclaimed mind readers with "genuine" psychic powers. They have this power because they can tell us the "truth" vs the actual comments and quotes on record.
Q: Did AR leave because of Mexus or other internal/market reasons? (beat to death topic x 1000 returns for extra controversy!)
A. While the drill results hardly helped, the prevailing evidence gives me the firm conclusion they left primarily for market and internal reasons.
1. The initial drill results were objectively poor. This is a legit reason to pull out eventually but not during phase 1 drilling. Only 1 in 10,000 geological anomalies becomes an operating mine so professional companies like AR don't just go "we drilled .2% of our targets so we declare this property uneconomic and we are leaving." That is not how exploration works in this industry. On my own claims it has taken multiple rounds of exploration to find economic gold. The AR drill results weren't good but they are far from a complete condemnation of the property as presented by other posters.
2. AR self proclaims a cost cutting and tightening period, based on need for capital and fear of a protracted period of low gold prices. (Ample direct quotes from numerous executives in the filings and the AR PRs around this period demonstrate this conclusively. Many are included in my previous posts.) Only on this board could someone post "I love strawberries" and the response would be "PROOF this poster HATES strawberries. QED" - It is literally the exact opposite of what is said. Personally I take the words of these well known executives at face value... but I am admittedly not psychic.
3. AR sells the ultra high grade La Fortuna project within a couple months of terminating the Mexus JV. So they got rid of Mexus because they have no potential but then their next act is to knee jerk sell of one of their best properties with lots of drilling and outlined HG resources because... I guess all that great gold they discovered has no potential too. It needs to be sold at pennies on the dollar ASAP because it is just too similar to Mexus. The true reasoning clearly can't have anything to do with what the management is saying: they are trying to cut costs and raise cash for a potential lean period and to fund Magino.
4. Gold sentiment craters during this period. Mid and large tier miners naturally cut expenses and lower costs. First up the chopping block is expendable JVs and exploration - this is an industry/company decision and has nothing to do with the quality of the areas getting axed. If Mexus gets the JV cancelled it is apparently because they are awful but if dozens of other juniors get a similar outcome for their agreements during the same market period this would be evidence away from the "awful, no potential" thesis. This is rational market activity (at least from a self preservation POV) and not a sinister indictment of any of the properties involved.
5. AR had a desperate need to raise ~200 M for their new mine while financing for these types of ventures is drying up (well documented by other analysts during this period).
6. AR undergoes a major management restructuring, publicly changing the focus from growth to capital conservation. This changes the direction of the company and the types of short term actions they take. This happens nearly every time in the cyclical mining industry (bull, bear action). In prevailing periods of high prices they produce at all cost and then during leaner periods they cut and optimize, cutting exploration and development in a penny wise- pound foolish (myopic) manner, which creates a future shortage of metals due to the huge development lead times. This act is what creates the cyclicality of the mining industry and future bull and bear markets.
So what is more likely to be true: AR used a small portion of their phase one drilling to fully evaluate Mexus' huge property and then left because they saw no potential or... all the other evidence is considered and they left merely to do what they thought was best for their company at the time?
