Met with the CEO and one of the directors late last week- I feel very confident about the situation, progress and direction of this company. The corporate culture has changed dramatically with current management, and they have outlined very clear paths to clearly defined goals on both the exploration/resource building side, as well as resumption of production.
They are well capitalized (meaning they have more than enough to continue exploration AND ALSO get back into production... which leads to self-sufficiency and no more dilution), and continue to present a exceptional technical team. They are also armed with extensive historical data from past exploration and production (which has come through their acquisitions primarily), which will make their "exploration" more a matter of definition and development, rather than trying to find previously unknown deposit. This is a major plus- less "hit and miss" drilling, and faster resource development.
My feeling is that the company is fairly valued for where it sits right now. The market is treating it like a producer, as they have production facilities and permits (mostly) in place.
This is, IMO, a double-edged sword. The positive is that it makes the company much more stable, and the share price will be tied more closely to actual progress, as opposed to speculation and shorting. Also on the plus side is that the conversion dilution is already priced in as well, so I don't expect a big hit when the preferred convert to common.
The negative is that it is not as undervalued, meaning (barring unforeseen bonanza strikes or another boon) we will probably see slow and steady increase in value as they work their plan, rather than big jumps.
For me, I'm thoroughly comfortable with that- I'm glad that this company is shedding it's speculative mantle in favor of an identity as a solid explorer/near-term producer.
Realize as well that their resource calculations so far are based on $1150 gold and $18 silver, so there is a bonus built in there already, which should be reflected in feasibility calculations, and carried onto future 43-101's....
Speaking of which, I look forward to their next 43-101, which SHOULD (IMO) include both updated resource numbers and some reserves (which means feasibility calcs) and should be released early next year.
I will not be selling my position any time soon, and will (as I can afford to) acquire on the dips.
AI
