Member Info for Happyhaddock

In terms of "just needing a drill rig" I'd be in favour of UFO committing our funds to buying our own rig(s) and having our own drill team on permanent salary.

At the minute contracting any drill crew is nigh on impossible, and costs a fortune as the demand is so high. Over the long term if you know you are going to be doing a lot of exploring then your own rig/crew works out cheaper, gives you more flexibility, reduces waiting times and your own crew aren't going to be drilling to get the job done and move on as quickly as possible but instead can aim to extract the most continuous/clean (hence informative) core they can. £150k would probably get us an acceptable drill rig, £500k something very capable. It may take several months to get built and delivered but then it may take several months waiting to hire one for just a few weeks before rejoining the end of the queue to re-hire it. The main advantage of contracting out drilling is that it is economic when you only want to do a little drilling, and then perhaps several months later do a little bit of very different drilling in a very different location.

If we could start 2022 with our own drill rig/team that would be a huge plus and selling point for us as an explorer and really show a commitment to "exploration"... however it merely remains a bit of pipe dream for this shareholder.

... wish it was Sunday.... that's my don't have to run day...

@ibmibm - I think the more valid point is that what it "could" reach at some unspecified point in the future is somewhat immaterial. Junior explorers share prices can move up and down a lot in an unpredictable and volatile manner.

If there's a strong probability you may need to take out your money in the short term then putting it into junior explorers in the first place isn't wise as it may be worth less when you need to take it out. Over the medium term of 2-3 years you'd hope fundamentals would move the price enough to off set any volatility but predicting exactly where the price may be in another 3years is a vague and imprecise thing. Given that the average development cycle for finding a new resource developing it and bringing it on line as a productive mine is about ten years, then that is far too forward looking to estimate share prices.... Simply focus on if you can see potential for growth and take each day as it comes... after all when companies like Apple or Microsoft were started nobody predicted they would be worth trillion dollar mkt caps in the future.

* and before anyone points out DSO is faster to bring to production I know this, but ten years is a good average for mining most commodities, even so I do think some here have unrealistic views about just how fast our DSO may come to market.

@ibmibm - Not sure I'd call myself an expert but that's very much a "how long is a piece of string" question entirely dependent upon as yet unknown geology. However I've previously put forward a case that if you apply a long term bullish view and assume things do all play out in our favour our SP could be measured in pounds rather than pence.

The mistake would be to make plans around this actually happening or to try and put a timescale on it, but lest just say that many companies with mkt caps around £1bn are still considered smaller juniors and that most institutional funds that invest in this space only tend to get interested in the the "early stage" companies around the point they have a mkt cap of a few hundred million... that is to say we'd need to roughly x10bag from here just to be big enough to be considered small fry.... And, although wildly improbable to the point of impossibility we'd need to x2000bag to put us in league with the major producers.

Not long ago I was in an e-mail exchange with Steve Todoruk at Sprott who said that UFO was far too small to have crossed his radar or for him to recommend to clients. If a fund manager's minimum spend exceeds the total mkt cap of a tiddler like us it's a waste of their time researching it however good its long term prospects might be.

I've said before I don't work to target "sell" prices, I simply keep asking the question do I still see a lot of growth potential in a company.... with UFO I do see lots of growth potential so I'll wait and see how big it grows.

I suppose I should add a caveat the the previous in that £200m would be a x100bag for me in terms of mkt cap, by the time you allow for placements and dilution I may need a somewhat larger mkt cap to x100bag in share price.

@Deanok,

UFO appealed to me for a few reasons I initially found it because it had a mkt cap of only £2m, companies with mkt caps in the hundreds of millions don't (or very rarely) hundred bag in a "useful" timescale. £200m would make UFO a x100 bagger for me and still remain a small mkt cap for a junior so there was plenty of room to grow. At the time UFO had two silver projects in South America which whilst a long way from being anything had potential under the right geologist and the price had absolutely collapsed from its days of being Arian Metals and yet we had new management that looked far more competent. That was enough to tempt me to buy something that was out of fashion. The fact we were looking at more projects in Australia was a bonus as it offered a bit of diversity both in terms of another "safe" jurisdiction and extra commodities should the South American silver take a long while to "do its thing"... As it is I now see the Australian silver as the better silver play than South America.

I remain a silver bug at heart and still see that is where UFO's real wealth is in the long run, but I like the fact BBG seems to want to stick with what he knows and is good at. You see many directors who pursue what is fashionable and will easily draw in new punters. People who are always starting something new without having the skills to finish the last thing that would keep the old punters happy. BBG is a geologist who said he wants to stick with proving up projects and moving them on up to partners rather than trying to make UFO a producing miner. At the moment it looks as if his focus is on iron ore so we'll see how that plays out over the next year or two, but if he finds himself running an iron mining operation I'd be much more wary than trusting him to oversee other exploration projects.... Running a profitable mine is a very different skills set to planning geological exploration, and in my opinion may require a change of the structure of the BOD. However if BBG can make us a decent profit by finding somebody else to mine our iron then great.

UFO is far from the safest play in my portfolio, but is the one I judge most attractive in terms of the risk reward ratio, all the more so when the potential reward factor looks to keep increasing whilst the risk factor is slowly diminishing.

@Parkboy - we can all look back on what ifs.

Myself I'd be holding three times as many shares in UFO if I had bought all in in one hit on day one rather than looking for positive confirmation and averaging up... equally I would have lost three times as much had UFO turned out to be a dud, where as I've said, in this sector the odds are in favour of losing money.

I am sitting on some investments that are in the red that I've never added to or chased down, but its easy to be laid back about being more than 50% down when it was only a few hundred quid you put in in the first place, harder to swallow being 50% down if you've slowly built up to significantly larger sums before taking the hit. I've said before that despite still being in multi-bag profits with UFO, the drop from 3p has cost me roughly twice my typical annual income in paper losses, so even getting back up to 3p, let alone double digits share prices will make a worthwhile difference to me.

@silverhorse - you've asked me this before and whilst I've said I don't tip shares I did previously mention a couple to you, plus if you click on my profile here on LSE you'll see a few of the other bulletin boards I post on, though UFO is my largest holding in the junior exploration space.

However in terms of learning about this sector you'd be better served by taking the time to wade through the dross to start to recognise what makes it dross such that the good ones eventually start to stand out. If you only research the ones others tell you are potentially good you'll learn far less, plus you'll miss out on the those that others call dross but which still go on to make huge profits anyway.

There are any number of sites that enable you to call up lists of companies by sector and then sort those by various categories... I just started with a list of all London listed commodity based companies sorted by mkt cap. I wanted to get a foot in the door at the very earliest starting point so I started with the cheapest and just skimmed their web site and then moved on to the next cheapest, and the next cheapest... once you've gone through many websites and investor presentations you get a feel for those that stand out which you want to go back and properly research the management and licenses. I'd guess half I bought into were companies well below £10m mkt cap at the time I invested, the rest include some larger names (though in most cases still deemed juniors) I bought into for other reasons.

Plus it doesn't hurt to hold back a lot of cash and build a position slowly in chunks as a company keeps delivering on the promise you saw. If you throw all your money in in one hit it's much harder to take the loss if you are wrong and the price crashes, I'd rather average up as a company grows, than average down hoping things will turn around. Though whenever possible I try to average up by buying pull-backs rather than chasing a rising price, and if adding to a position I try to keep my average prices comfortably below current prices to leave room for the inevitable price drops that are common in this sector.... A great theory if you can make it work...

@crossfyre - thanks for the kind words; - investing in junior explorers, even the best of them takes, a certain dispassionate approach simply because so much that happens to them is entirely out of their own control.

Geology can make the greatest management with the best of plans look like idiots, just as easily as it can make lucky idiots very rich very quickly. Add on top of that the fact that the majority of moves in the share price are driven entirely by fickle sentiment of uniformed private investors guessing about the future rather than anything to do with the companies current fundamentals. It really can be a sector where most "standard" investment advice becomes redundant... there are no revenues to evaluate profits upon, even the value of assets is an unknown quantity - something that takes a lot of additional fund raising, expenditure and time to establish. By most conventional valuations junior explorers should all be worthless until they have grown to be much more than junior explorers, we are all just paying to get a foot in the door at a "cheap" price on the chance it later turns out they are actually worth a small fortune.

Nobody knows where the share price of UFO (or any other explorer) may be in a year or two, but like most here I've done my research and I think the odds are in favour of UFO being priced at a lot more in the future than now. As to how much more, or just when that future may arrive... well trying to predict that is for those deluded enough to think they really understand the sector. I'm happy to acknowledge I merely know enough to appreciate how little I understand about it, something that makes me very cautious, where as extreme confidence seems to stem from a failure to fully understand the risks leading to repeatedly getting things wrong.

I reckon that over 5-10 years one really good junior explorer will make more than enough profits to cover all the losses on a handful of bad ones. Yet across the sector the failures massively out number the minority of successes meaning the sector as a whole is a huge loss maker. I am hopeful that UFO is that good explorer, just as I am hopeful that the more than a dozen other juniors I'm invested in are also good ones. Probability suggests I'll be wrong on a good number of these but I only need one to make it, and if I beat the odds and two or three really fly then all the better.

@b-c-b - like you I am finally in profit here again having done all my buying below 2p, but that was all before the spike to 4p and back again rather than having bought recently.

Nobody likes to see any investment in the red but the potential here meant I was never going to sell up until the unlikely event of several drill results coming back showing our ground is empty, something which looks less and less likely with each new RNS. If you invest on long term on fundamentals then day to day moves in SP aren't so relevant.

Well events of the last year or so have brought a lot of new (and young?) investors to the junior exploration sector and the silver space, all with dreams of making it rich quick... Statistics suggest most of these will lose a lot of money through impatience and poor timing.

Any of those investing in UFO over the last 12months will be getting a good education about the erratic ups and downs, as well as the endless periods of not much happening that can go with investing in junior explorers... So just remember it is perfectly normal for great companies to go through large drops en-route to success, juts as it is perfectly normal for them to take years to reach that success but make their big gains over a few relatively short periods.

You can play the long game on fundamentals or the real short term game trading momentum, in between there s a void of pain for those who aren't quite sure of their strategy or their emotional discipline when things get tough.

Most of those the industry labels "experts" will tell you if investing in such early stage explorers that haven't yet got JORC defined resources then its all about trusting the management.... BBG has made a choice today that tells us a little more about his management and plans for UFO.

@EWT98 - I'd have been surprised if it was even going to be worth as much as £2m profit to us, at current prices the silver in the tailings is likely worth no more than £4m but by the time you allow for the fact that the owners weren't going to just give them to us, the fact we'd need expenditure on processing the tailings and we wouldn't get 100% recovery anyway I was working on the fact it would have been roughly £1m in the bank if it came through.

A useful little cash boost to a small company like UFO with a mkt cap of about £30m but insignificant in terms of what some of our other projects could be worth.... so as you say a non-event which has nevertheless wiped 10% of our SP

Well markets never like news about not doing something so a drop in SP seemed inevitable , but somewhat odd since it is effectively a notice to say we still aren't doing something we we never doing in the first place but may consider doing in the future.

@Max the situation this time around has the potential to be much worse and hence much better for silver. However it is a wildly different situation with far too many unknowns to predict how it will play out; In times of uncertainty precious metals have previously been seen as a safe havens, but no-one can guarantee the extent that will be the case this time or how desperate authorities may keep rewriting the rules to defend the status quo.

Much as I recognise what is being done to the dollar isn't good, and have long stated that I expect the Chinses yen to become more relevant globally going forward, I think it is far from certain that the dollar's total demise is a given. Every other Fiat currency is doing badly so I am far from certain the dollar will lose its status as "reserve currency". The game changer will be the new "thing" governments try to impose on us before the whole population reject existing Fiat currencies. Who knows what that new system will be, but past precedent suggests it will be essentially the old system dressed up with a lot of PR and marketing about how it is new and better, most probably through being digital. If the sheeple of the world buy into that then things may rumble on a bit longer, if the people reject what's offered and instead impose their own systems on governments then that is when silver may take off big time... Is that likely though?

I've listened to or read hundreds of conflicting opinions about the future and I've placed my bet on silver with no idea what or when it will pay out, but I do suspect it will pay out at some point.

@jemchipsa - I do think I can agree with most of your last post, and definitely agree that some of the talk on here is very excitable and overly optimistic in terms of how quickly things may happen. Far better to accept that exploration is slow and uncertain and be pleasantly surprised if things do come good very quickly, than expect everything to come good tomorrow.

I'd be a little less supportive of the notion that UFO are "just going anywhere and not constructively in tune with a business plan" . There is all manner of administrative permitting to get through to do anything in exploration and the last 12months have seen all manner of atypical delays and problems across the whole sector. UFO may or may not have wished to proceed a little differently to how they have, but I am sure that we are following a plan that has had to be adapted to allow for what we have ben able to get permitted, rather than do nothing and wait for things we may have preferred to do.

Judging UFO now would be somewhat akin to judging the performance of a race horse based upon how it stands still in the back of a horsebox in a traffic jam on the M6. I'd withhold judgement of UFO until we have cleared a lot of the industry wide problems, even if that does mean accepting things have been a bit lacklustre these last few months.

@Max111 - whilst what you say about penny silver stocks in the 60's is true, that was different era when the gold price was formally fixed to currency and when silver was part of the day to day coinage in people's pockets. I am sure speculative fever over silver will have its part to play going forward, but I'd be surprised if things followed the same play book as in the 1960's.

@jemschipa "Why do they need to drill more ?"

To prove up some of our licenses to the point of having JORC compliant resources that majors can realistically value. You may consider what has been done so far "extensive drilling" but most majors wouldn't even consider it scratching the surface. To date we have a very old JORC resource on our remaining silver at EH which in terms of a major partner is such a tiny amount of silver they wouldn't consider it worth the effort. Then we have a drill program for the The Sirius extension the results of which once we get them will feed in to a MRE for a small amount of our iron. The rest of our projects are still so early stage they are far from having any formally defined resources to market to potential partners. If you market them as they are you get no offers, or as happened with DV2 a partner that made, what to me was an underwhelming deal for us in the first place, and even that they pretty quickly walked away from because the drill results didn't come in as they wanted.

Would Capstone have offered a better deal if we'd extensively drilled DV2 in advance such that we could offer them a clearly defined resource; almost certainly yes. Would they have walked away from that deal after a short period - not if they already knew what they were buying.

If people don't know what they are buying they will either, as Dip66 say, not want to buy at all, or make a derisory offer that reflects the real risk of getting very little for their money.

@jemchipsa - Getting JV's is easy if you are willing to give away all you've got for a pittance, you get a good deal through drilling to prove up your ground such that potential partners are willing to pay a better price for it. You effectively get paid for taking the risks that reduce other people's risks.

Saying you want UFO to secure a JV but don't want them to spend money on drilling is a somewhat oxymoronic statement as we'd end up selling up for pretty much what we bought licenses for if we've done noting to improve understanding of them in the mean time.

Many here are frustrated by the slow progress but UFO are just doing what junior explorers do; that is raise cash, spend it exploring and hope the results of that exploration increase the value of their holdings. You then raise some more cash to spend on more exploration. It's a slow rinse and repeat situation as you keep plodding forward.

People who invest in a junior explorer expecting quick profits and no fund raising/dilution may benefit from researching how the sector works.

Nothing there I'd disagree with Max, but to apply my usual note of caution I would say that pressure has been building in the silver space for a very long time, and for almost all that time folk have been predicting that the price is about to explode. I remember reports a decade ago stating that silver was about to hit $100/oz - of course we all know it never did.

Whilst a big move in silver looks increasingly inevitable, let's not mistake that for imminent. Silver attracts the most fanatical supports but also spends the vast majority of its time disappointing them, and I say that as a long term silver bug who would dearly love to see silver finally make the move others have been predicting for many years. On the plus side is that, as we all know, when silver does move it can move very far and very quickly, and even if it doesn't make a major break soon, autumn tends to be a time when silver does well anyway which might just nudge a bit of action in the direction of UFO.

AS you say AG1989 - ECR are making al the right moves and and that is starting to generate decent results... Yes we need a lot more of these results but simply more of the same will be just fine even if we don't do "better".

As junior explorers go... well things here feel pretty comfortable at the the moment which, whilst there are no guarantees in this sector, hopefully bodes well for the share price moving in the right direction.

"The North Ruth silver discovery is high grade mineralisation (over 1.5 ounces a tonne), so it's not a complete write-off. "

1.5oz/ton is roughly equiv to 45g/ton which is pretty indifferent for silver, borderline economic depending upon circumstances but in the grand scheme of things nothing much to justify a primary silver mine.

Ideally you want grades measured at well above 100g/ton to call it high grade mineralisation... put in context another of my junior silver explorers has one site with grades averaging 2,000g/ton peaking at 30,000g/ton and that is on an old project that was shut down for being uneconomic (even the old tailings look to be >400g/t), but which may become economic again with higher silver prices.