PENNIES TO DOLLARS

[basserdan]

Thinking about Moneta Porcupine (ME.to)...

11/1/12

...and its PEA today. On the one hand you have a company that, according to the weird and wonderful world of PEA mathematics, requires one point five billion dollars in order to set up and run its mine that will potentially dig three million ounces of gold out of the gold at a decent profit. On the other hand you have a company with a market cap of ~$40m.

So basically, the tiny company can't build the big ticket mine...ever....ever ever ever. It needs a bigger mining company to come in, buy out ME.to and build the thing with the required funds. Therefore, once you consider the company market cap against the cash needed to build the thing, it's virtually irrelevant. Therefore, it doesn't matter what ME.to's share price is right now; it could be 10c, it could be today's 23.5c, it could be double that. It's near impossible to put a "correct" price on ME.to today and that's the only thing you'll ever need to know about the company in order to avoid owning its shares forever and we haven't even touched upon niceties of how ME.to proposes getting 2m of its 3m oz Au from inferred into indicated in order to get those ounces into any eventual feasibility study.

There are lots of other juniors in the same boat. Avoid them all.

http://incakolanews.blogspot.com/2012/11/thinking-about-moneta-porcupine-meto.html?

1 comment:
Anonymous said...
And with a strip ratio 5.6:1 its much more unlikely.
11:33 PM