PYX Resources: Achieving volume and diversification milestones. Watch the video here.
I've sat through many of Andrew Scott's interviews, both in person and on video, but have never seen him apparently so perplexed. The RRR investment case gets more and more confused and unconvincing as time goes by...
https://www.asx.com.au/asxpdf/20180831/pdf/43xwqpf5fql5x1.pdf
"If shareholders did have such a view why didn't they sell last week - they had plenty of time to after the H1 production updated when the price was above 24p."
Perhaps simply because they were waiting to see where the sp would settle after the flurry of "excitement" following the Q2 update, and to see what sort of trend would emerge.
Seems very much more likely that some big(ger) holders are trading this than someone taking a new short position of 100,000s of shares at current prices.
"NickD these figures are very compelling.... so why not release to attract more investors?"
Why do you think that the company would be especially concerned about attracting "more investors", as you put it?
The share price has been on upward trend since January 2017, 20 months ago. Over that time, the mcap has appreciated at a sustainable rate and there have been very few occasions where it has become overheated, or retraced to any significant degree. Anyone who has invested over this period is sitting on at least a modest profit. Many have already made life-changing sums.
During this period, the company has continued delivered on long term objectives with relatively little fuss or fanfare. Interviews are rarely given except when milestones are reached. RNSs are released far less often than any AIM-listed share I have ever paid attention to, and when they are released, they tend to stick to facts rather than hyperbole.
Every once in a while, there will be a period when this forum becomes preoccupied by the lack of news, or the lack of marketing effort of self-promotion.
But given what I said in the first paragraph, I tend to think the style and MO that Fortune and his team have chosen to adopt has proven to be a remarkably effective one. I continue to see this as a very compelling medium-to-long term investment and as such, I am more than happy for the share price to continue this understated upward trend, which it appears to be doing just fine without endless media appearances, boasts and predictions.
The difference is that the other company is revenue generating, the sp is at an all time high, and the plan is fairly clear. The sp has been uptrending for months, and so no, it's not the same situation at all, and anyone sitting on the sidelines awaiting a better time to invest there would need their head examined.
"I disagree with your prediction of a 10% rise following PEA"
I never said that the rise will be 10%, only that this is the average share price response when equivalent explorers have published a PEA for their flagship project.. I mentioned it only to provide some balance to what I saw as rather wild predictions of the share price rising by 40, 50, even 100% on PEA alone.
If the resource update is far in excess of market expectation, then the share price should rise. I would however caution investors and would-be investors not to assume that the price rise will mirror the increased in-the-ground value. That could happen, but the share price of an explorer rarely tracks perceived asset value, and whilst there is still uncertainty about where this project is going, how much it is costing, and whether there is actually a plan to take it all the way to production, I doubt you are going to see the huge buying that would be needed to drive a significant re-rate.
Once investors believe this project is hitting crunch point - and, let's face it, the only realistic way that is going to happen is if the m&a rumour mill begins turning - then the herd will arrive and the sp will probably begin testing previous highs.
"Also disagree that on significant news you would be able to get in here paying just a 10% premium to whatever the SP is, if this was the case everyone would for news before investing "
But isn't that precisely the point. Why has the SOLG share price been downtrending for the past 2 years? It's because there is very little interest in buying whilst the project timelines are unclear, the cost of drilling + other exploration activities is significant and the risk of dilution persists. I would suggest would-be investors are doing precisely what you said, and are waiting for news before investing.
"Of course you may get back in cheaper, but then again you might not, which is why we all make are decisions individually.
Goodluck over there."
Thanks, and gl to you too. It is unlikely that I will be so lucky with timing, but I continue to watch here because I see it as a potentially good investment some time next year, and if that time happened to co-oincide with a sensible exit point from the other share, then who knows...
You might get an offer tomorrow as happened quite out of the blue with MARL, and in that case, I will miss out.
"When the price starts rising rapidly, it is very often difficult to actually buy, especially larger volumes."
Whilst that can sometimes be the case, it tends to apply to small cap companies that have only recently listed, or have been dormant / off the radar for a long time.
The challenge here, having an sp that rose so dramatically back in 2016, and having been downward trending ever since, is that there are going to be huge numbers of share holders currently in the red. When the share price starts to rise, it is inevitable that some of those are going to begin selling at least part of their holding. For some, it will be a relief to be able to get out at break even point, for others, desperate for the cash, the rise will come at just the right time. Others will fear that the same spike will happen again that happened 2 years ago.
Clearly this will not be the case for everyone, perhaps even for the majority, but I would suggest there will be plenty of sellers and this will provide liquidity to the markets that will enable the MMs to keep the price reasonably steady whilst providing opportunities for buyers to take a big position if they so wish.
"20th December 2015 share price 1.28p.
26th June 2016 share price 2.98p.
26th December 2016 share price 24.85p.
24th June 2017 share price 44.88p."
Your argument might be compelling if you had posted two consecutive days with a mega rise that was then sustained. As it is, posting dates 6 months apart proves absolutely nothing.
If a welcome offer significantly higher than the current sp is received tomorrow, then the sp will gap up close to the offer price and anyone who is not invested will miss out, as you put it.
Any other scenario, including m&a rumours causing the SP to swing upwards as happened in the second half of 2016, will provide people with plenty of time to jump in at that time. Sure, they might miss out on the first 5 or 10 percent of the rise, but having avoided sinking their money into a sideways (or downward) trending share for 2 years, and all of the opportunities that will have provided to make profit elsewhere, I am pretty sure that would be more than acceptable.
@KB007 - I am curious. If you think it's going to production, why are you invested now? Two or three more years of expensive drilling and studies. I am sure the sp will go up closer to the time, but if you're so convinced this is where it's going, surely it would have been a better strategy to sell up when you reached than conclusion, and invest elsewhere until this got closer to the time for dividends.
"They are supposed to lead and inform the market rather than play catch up with the reality in front of their eyes."
Actually, their brief is to act in the best interests of the company and its investors to drive the share price sustainably upwards over whatever timescale suits the current activities of the business.
Mission accomplished.
I believe this comment was based upon a preference for the share price to rise gradually. They will keep on increasing the valuations a few pence at a time, which is in interest of the majority of investors.
My view on that, FWIW, is that every attempt will be made to exceed the phase 3 production target and timescale. But this will not be because V prices have been especially buoyant over recent weeks. IMO, the market conditions have telegraphed the correct strategy for months, even years, and another 10, 20 or 30% on top of already highly profitable pricing wouldn't have been needed to encourage the company to do whatever it can to increase production asap.
Know the company as we do, I think we can be quietly confident that there was a degree of conservatism in the targets for the phase 3 expansion and there is every chance that these targets will be exceeded. Under promise, over deliver.
The 31st Aug 2016 RNS would suggest either that Yellow Dragon crossed from > 3% to < 3% on Aug 9th, or possibly that they had finished their disposal on that date.
On Aug 9th 2016 the sp was somewhere between 1.45p and 1.5p.
Nah not jumping around at all. Not making myself sufficiently clear maybe. The only point of my original post was to say how share prices react - on average - to the situation that was being speculated about (the release of the upcoming Cascabel PEA).
Clearly, if the numbers delivered by the Cascabel PEA prove to be better than the numbers delivered in 50% of PEAs from equivalent projects, then the share price response could quite possibly exceed 10%. But take 10% as a baseline and work from that ... I'd contend that a rise of 50% or even 100% that some here are hoping looks to be pretty optimistic.
In my later post I was contending that the share price response to a PEA is not just a reaction to the contents of the report. Any potential investor is going to be looking at whether it's a good investment according to their own outlook, and if all signs lead to a further X months or years of expensive exploration work before any further upside is evidenced, some investors will be put off regardless of how rosy the long-term project economics are looking.
So yes, I suspect we are broadly in agreement about the PFS being mush more likely than the PEA to be the trigger for significant share price movement. That is, of course, if NM really is open to sensible offers for Cascabel. If he is serious about production, then I'd be looking even further out for the major share price growth...
Wow you do talk some dross. Obviously fundamentals (your size, grade and metallurgy) are important, but fundamentals are by no means the only determinant of share price reaction to events. If there is an average reaction of 10% to a PEA this will be in part be the response to the "average" fundamentals of those studies, but it will also be influenced by what chapter of the story a PEA typically is. As you said yourself, if there is a PFS planned, the PEA is already old news, despite the fundamentals highlighted by it. It is also clear, when a PFS is part of the plan, that there are many months, if not years, of further exploration work and probably a bit of a news vacuum during that period. In this case, for a non profit generating business, quite obviously there will be certain investors who are just not interested in taking a long term position.