Member Info for Happyhaddock

Much as I've been a "silver bug" for years, even decades now, I am not so sure I share other's belief that silver's big break out is imminent.

Many on youtube who proclaim themselves to be experts try to convince the world that the gold:silver price ratio is important, and that because it is now higher than historically normal, silver's price must shoot up to compensate. Many of these "experts" also claim that the natural ratio at which these two metals formed in the ground should set the price ratio.

However;

The relative costs of extraction would currently suggest gold should be very roughly x100 times higher in price than silver, although that would ignore the fact that bullion supply is priced much more on existing inventories than newly mined/refined metal.

Silver may have formed in the earth's crust at a ratio of 16:1 compared to gold, but historically we have mined a greater proportion of the earth's gold than silver. If evenly distributed originally this would imply that there should be more of the easily/cheaply extracted silver left than gold. (albeit a relative term as finding any large rich new deposit of either metal is now rare)

Many talk of silver deficits driving up prices but silver is in the same sort of "deficit" as gold has been in for the last few thousand years: that is to say new production each year exceeds that used in industry thereby adding to the surplus stored in vaults, but that surplus is not enough to totally cover annual investment demand meaning a new price has to be established that encourages change of ownership of some of the bullion already stored in vaults. The major difference is the relatively modest amounts of "surplus" silver added to vaults each year compared to gold.

Do I believe that new technologies and increased industrial consumption is putting pressure on silver supplies- yes I do but there are vast quantities of existing silver that could be recycled and returned to market as newly refined metal if prices moved enough to encourage this, something which I believe will buffer any actual real terms manufacturing deficit.

Do I believe that a long running gold bull market can drive speculative investment demand for silver resulting in occasional crazy price spikes - yes I do but sense we may be some way off that just yet.

Forecasting the future is a fool's errand where I've said before I don't expect my predictions to be any better than other people's. However much as it may be an unconventional and possibly unpopular view, I can't help but feel we will see the gold:silver price ratio set new record highs (possibly as high as 150:1) before silver makes a big move up and that we may have to wait another few years for silver to break out.

I do expect a crazy silver price move at some point, but hold silver on expectations that for a few more years at least silver will keep nudging up in price as gold prices climb, not on short term expectations of an explosive move.

@norm - all true ... as I've said many times before, If I can't mentally write off a position in a junior explore as an immediate 100% loss then I'm committing too much of my cash and should be looking for somewhere safer for it.

Some like a boozy night out at the pub, myself I like the challenges of speculating on the smallest explorers so this is where my beer money goes... very separate and distinct from investing for my retirement and yet if you strike lucky on one junior explore that really makes it to the big league then a few quid beer money you dismissed years earlier might just fund a good chunk of that retirement.

Whilst the risk to reward ratio at the current mkt-cap makes this a very appealing speculative punt, lets not forget that whilst the possible reward here is huge, the probable risk is also huge... this is as close to gambling as you can get based upon the outcome of future unknows.

WSBN are however finally back in the game of actually exploring, drilling and marketing what they are doing, for too long they were all risk with no potential reward as a consequence of effectively doing nowt at all.

I think the matter of gold prices falling is all a matter of perspective, if you are a short term trader who views a 5day chart as long term then yes, gold prices are falling. Otherwise all the driving factors that have been moving gold up remain in place and over any meaningful time period the trend is still upwards. So, unless the drop continues much longer and goes down much further, all we can say for sure is that the last few days is so far just noise or a small consolidation in a much bigger up trend.

@normbeef - seems we are suckers for punishment when it comes to liking a punt on all the same really speculative juniors.

In my case I found WSBN many years ago at the same time as UFO which we've both "endured" through good and then a lot of bad. However, I refused to buy in to WSBN when it was on it's crazy run up to about 20p and had to wait ages for WSBN to get back to my first target for a very small buy in at below 2p which (has so far) turned out to still be far too high. However earlier this week I couldn't resist taking another chance here on WSBN as whilst the odds of success seem remote, the potential gains from such a low mkt cap if we do strike something seem just seem too great to ignore.

Definitely not one to mortgage the house for, but if someone offers you way over 100:1 odds on a horse you rate as having perhaps a 10% chance of winning you got to have a flutter.

Silver makes big volatile moves all the time, I hope you are correct and that this may finally be the start of "the big one" silver bugs have been talking about for decades, but I've said before silver can be up 3% in the morning and down 3% by the close of markets. So unless silver can make a move of over 5% in a day and then hold it the following day I tend to treat it as noise rather than signal... we still need to gain more than 1% just to get back to this months highs.

I'm reminded of the following post I made here some months ago having previously received considerable abuse at a time this bulletin board was again getting overly excited about GWMO's "imminent" transition to become a gold producer. A post whose sentiment remains valid here today, and across the entirety of a risky junior exploration sector noted more for marketing hope and future potential than completed achievements.

Well... dilution, delays and disappointment are just normal and routine in the junior exploration sector, especially those trying to become junior producers. So, as I last said when some here fixated on the 16th Jan 2025 as being the date that GWMO would officially become a gold producer;

"there are grounds for patient long term optimism here, but also a lot of excitable folk setting themselves up for short term disappointment"

I'm sure these latest uncertainties will eventually be resolved, then we can move on to the next issues we need to address so as to keep working towards the desired outcomes we want ... it is just unfortunate that impatient markets and unrealistic expectations typically deliver such volatile changes to share prices on such statistically probable delays and problems.

"Give an infinite amount of monkeys an infinite amount of typewriters and an infinite amount of time and at some point they will eventually recreate the works of Shakespeare."

Give a handful of monkeys access to a keyboard and a few spare minutes and they will effortlessly recreate an on-line forum!

Well it is a rare day when you look at your equities portfolio and not only is everything up but by a collective average of over 4% ... even UFO is making a token move in the right direction.

Still seems too soon to suggest that the attention major miners are getting is starting to lift all boats down to the smallest, explorers, but perhaps not too soon to consider that some of the crazy sentiment of late 2020 might just be starting to simmer again and that the junior exploration sector may yet get another day in the sun.

@Samroy - I'm sure we can both agree that there are many ways of valuing a company, and that those means can be far more objective, as opposed to subjective, if dealing with large companies with stable revenues and profit margins.

There is an argument to be made that any "loss making" company that spends money each year without generating revenue to fund that expenditure should have no value. However, that completely ignores the re-sale value of existing assets in relation to the size of the losses and overlooks the speculative nature of "growth" companies where you subjectively apply discount rates for perceived risk and the time value of money to "pre-purchase" potential future revenues and profits.

Junior exploration companies fall squarely into the category of "speculative punts" where every means of valuing them includes far more subjectivity than objectivity because of the huge amount of future unknowns and uncertainties that have to be accounted for. I've said it before elsewhere, but unless I can mentally write off a share purchase in a junior explorer as an immediate 100% loss then I'm taking too much risk on future unknowns and need to put my cash somewhere safer.

It may go without saying but I place the lowest valuations on explorers who are simply looking to make a find, and only slightly higher valuations on those who have some sort of find they still need to measure and define. Clearly the more information defining a find that you have, the more reliably you can project in to the future as to what may happen to it. However, until a company has put out a DFS with reliable costings for actually getting minerals out of the ground and to market I remain very cautious in how I, or others, value them. Even with a DFS I remain acutely aware that this is a sector where projects almost always take much longer, and cost much more than budgeted, to bring to fruition. Sadly I've put money in to more than one mining project that was far more advanced than LND and which was very profitable on paper only to see them go bust because the real world couldn't replicate what was projected on paper.

Others may see things very differently, but I don't so much see LND as currently undervalued. I see it as fairly priced based upon what little can be reliably valued right now, but with much potential to deliver additional quantifiable value in the future, arguably the near future. It may just be semantics in term of how we define undervalued but if I can buy into a company and only pay for what I feel can be reliably valued at the time, then the extra potential is effectively a "freebie". All too often in this sector you are paying a considerable premium above quantifiable value for early access to that potential, which greatly increases the downside risk should it not deliver.

@Samroy - it makes a pleasant change to be able to engage in polite debate about differing views rather than have to endure the more usual bickering and insults typical on LSE, so I appreciate you keeping things civil.

To clarify I was neither suggesting that LND is overvalued nor undervalued, merely that having a mkt. cap. below 2021's mkt. cap. when things got crazy isn't the most useful bench mark to judge whether today's valuation is fair. I would however challenge your statement that broker valuations are typically "conservative" points of reference.

If only for the academic point of interest I'd love to encounter any broker with enough integrity to be hired by a company and still issue a valuation suggesting that the company is over-valued. Paying broker's to issue valuations is part of a company's marketing, where these brokers are recompensed either in the form of a direct fee, or commission on each new investor brought to that company. Consequently I struggle to see brokers as truly independent when their wages depend upon finding reasons to show that their client's company should have a much higher share price. By and large broker's valuations always declare a company as being significantly undervalued regardless of what its mkt. cap. is, or arguably should be. Are you yourself aware of or able to provide links to any broker employed by any company that has issued a valuation even a little below mkt.cap.?

If brokers truly were independent and not dependent upon payments from a company I can see them being a little more willing to declare something as over-valued, but even then investors tend to look to brokers for recommendations of what to buy more than what to avoid. Consequently brokers are more likely to say nothing and just talk about another business entirely than spend time talking about things that they feel are overvalued.

I saw potential in LND when I first bought in pre-consolidation when shares could be had for under a penny, things then lost focus for a few years but I again see upside potential for LND from here. However, whilst broker valuations may be a bullish reflection of potential future upside, I don't view broker's valuations as "conservative" indicators of current fair value. At the end of the day the world would be a boring place if everybody thought the same, we both seem to see value in holding shares here even if we've arrived at such views for different reasons.

Well on a daily chart we've taken a dip this morning having gone ex-dividend, but step back to look at an annual chart and the little drop today is just noise within the larger up trend.

Well, if there is any significance to tiny trades it is a topic of conversation across some other junior explorers bulletin boards as well as ours, so UFO isn't the only "tiddler" seeing tiny trades at the moment.

I'm sure if "something" happens in the markets today there will be plenty of folk wanting to make the connection back to these tiny trades.

@Samroy - I'm not disputing the case for LND as I've been a share holder here for many years, adding considerably to my position when we dropped close to 2p a few months before Rick rule and Eric Sprott became shareholders. I even added a few more to my position at the start of this week now holding ten times as many shares as I did back in 2021.

However I would challenge the notion that me must be "under-valued" because our mkt cap is now much less than at some other point in history. For that argument to stand you would have to prove that the earlier valuation was fair and reasonable. We all know that late 2020 in to 2021 was a time of reckless exuberance in the junior exploration sector when even the tiniest companies with no resources could see huge multi bag moves on no news. The worst/best I experienced back then was company going from below a £3m mkt cap to about £100m in four months without actually making any physical progress.

LND looks appealing based upon fundamentals and macro economic factors but I wouldn't use the crazy prices of 2021 as a yardstick against which to measure anything, though no doubt some may hope to see a return of such crazy exuberance to the sector.

@Sinter - whilst I will admit to thinking of my self as a long term reason driven value investor more than an emotional short term trader, I wouldn't go so far as to say I don't "regret" my purchase here.

It is true I took a small speculative punt here years back when UFO's share price was not too dissimilar to now, so it's not as if I'm looking at the large losses others are. However, whilst I can accept that potential doesn't always deliver results, I do regret the direction management have taken the company... there is this sense of what could have been where it feels as if we have ignored or squandered our best chances because management got caught up in the brief hype surrounding the pandemic driven spike in iron ore prices. This resulted in us wasting years and resources pursuing a project that was always going to look questionable economically once markets returned to normal.

I'll continue to just hold my few shares here and wait and see what the future holds for UFO but have far less hope than I did five years ago despite the fact macro economic factors arguably make some of our non ferrous metal licenses more appealing than five years ago.

I remain to be convinced that comments on inter-net bulletin boards have any lasting impact on share prices, though did say when I joined LSE in 2020 it was through an academic interest in observing the reason resistant faith of the irrational individuals that were driving the junior exploration sector to wildly unjustified highs back then. So I will concede that markets don't always move in sensible ways that can be justified or predicted by rational analysis.

@Sinter - do you really believe anything written on an inter-net bulletin board has any real influence on share price moves?

Whilst I accept that there will always be one or two fools that act purely on emotion who may get carried way by other people's hype, such individuals rarely make money, and as a consequence of losing more than they make tend to have very little to spend to move a share price.

Those individuals with deep enough pockets to actually move a share price tend to have generated such wealth by ignoring the herd, trusting their own research and not listening to tips or hype from strangers on the internet.

Do folk really think that the dividends play such a major role in deciding when to buy and sell? If a company were paying out 10% or 20% return in a dividend then yes I could see a big incentive to factor it into timings .

However FRES is a company where just daily noise can move us up or down by tens of pence per share in a day (38p today as I type this). In percentage terms this next dividend isn't tiny but nor is it of a size that would dwarf the volatility we may see on a typical day of trading.

I don't doubt ex-dividend day will influence some to sell but I suspect general macro economic news and broader precious metal price trends may be far more of a driving force in terms of influencing when people buy or sell.

WSBN is a company that wherever it has drilled in the past it has almost always found just enough traces of mineralisation to warrant further drilling. Sadly that further drilling has simply repeated the trend of finding just enough traces of mineralisation to warrant more fund raising to pay for yet more drilling.

At such a low mkt cap it may turn out to be one truly rewarding speculative punt IF it actually discovers a worthwhile resource. IF not it remains one of large number of speculative punts still looking to lift itself out of the dirt and become something.

I've seen this share at above 10p and at 0.1p all based upon excitement and prevailing sentiment yet with little meaningful change in fundamentals. So just keep in mind that the "tiddler" junior explorers operate in a world of uncertainties, trading on hope and potential.

I'd like the market to prove me wrong for a change, but such unexpected surges up almost always result in near immediate drops back down again.

Hard to imagine there won't be some selling on this little spike.

It is probably too soon to claim that it is FOMO excitement and safe-haven commodities mania like we saw in 2020, but most of the big FTSE listed precious metals miners are doing well which is lifting the smaller one asset producers.

If you will pardon the crude analogy somebody else on another bulletin board just summed things up by saying that you can tell you are getting close to such mania again when "all the AIM listed turds that won't flush float to the surface at the same time."

Others can decide for themselves whether we fit that category but a lot of tiny mkt cap explorers are seeing big moves at the moment without having released any news to justify the moves... so we aren't alone in making an unexpected move up.