RE: Stockbox interview25 Jan 2023 21:07
Well, it won’t come as a surprise to anyone that I live in a different universe to our resident disgruntled trader. I thought the interview was good, once you get past the obvious disappointment of the fact that we are unlikely to make a big discovery in the present drilling campaign.
1. All of us who have invested here have invested in a company whose entire proposition is relying on geophysics to explore land which is not favourable to non-geophysical exploration methods. That is a high risk proposition. It is for that reason that we have such an extraordinary land package at a low cost and market cap. It is also a high reward proposition: that’s why we’re here. What we witnessed in 2022 was the difficulty on geophysics-led exploration. We missed B1 by a hundred metres or so. The ring structures at Ditau turned out to be (probably) not carbonatites (although they may be IOCG deposits). The Dkar/NGP contact at 082 is deeper than hoped. All these are bad outcomes and they explain why the SP is where it is. However, they are not outcomes for which the company is particularly culpable. They are the manifestation of the risks we all invested in, plus a bit of bad luck. I continue to hope and believe that our luck will turn and the risks will start to pay off. If they do, the potential is simply enormous (that’s why we’re here).
2. I still believe in the risk/reward trade off, and I think many LTHs do too. However, there’s no denying it’s seriously demoralising to see the SP where it is, and dilution occurring at much lower levels than where many of us invested. Thus the prevailing sentiment among shareholders is “we need a discovery ASAP; then we’ll get back to being excited about the tech and the potential and how far we might fly”.
3. For these reasons, I’m actually in favour of “expansion” if that means what Ben described in the interview, namely picking up low hanging fruit at bargain prices which are only available because capital for exploration is currently hard to come by. Obviously any given project has to be judged on its own merits. But if we could get something with an existing known resource but with potential for major extension, I think that would be a good fit. Even better if it’s amenable to some crude mining in the short term. No idea if this is the sort of thing they’re looking at, but if it is, my feeling is that it would improve the balance of risk and certainty and allow shareholders to relax a little more, and give the high risk play the time it needs to come good.
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