Good Post14 Jun 2020 12:26
Some good posts on ADFVN and no trolls.
marketanalyst113 Jun '20 - 21:37 - 4280 of 4283
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Trader536, you’re absolutely right; the chart looks incredible.
But that aside, the company’s staggering fundamentals should trigger the market to re-rate the shares sooner, rather than later, as the stock is profoundly mispriced.
I mean, take a look at the company’s current market cap of £11.25m (4.5pence per share); allowing for cash and cash equivalents of £3.5m (does not include the £2.1m gold loan available for drawdown before June 30, 2020), the market appears to be valuing the company’s flagship asset, the Akrokeri-Homase Gold Project (AKHGP), at £7.75m.
Seriously?
£7.75m, against a post-tax NPV of £23.3m (at US$1,750/oz gold price which was hit yesterday…), is nothing short of vacuous nonsense.
But it gets worse…
The £7.75m valuation assigns ZERO value to the asset’s significant post code; AKHGP lies 12km along strike from AngloGold Ashanti’s Obuasi Mine; boasting a total endowment 70Moz Au (historic and current); assigns ZERO value to Paracale Gold and BCM’s presence on the BOD – who are hardened, and highly respected, gold investors, and who collectively own 48.2% of the company; and, finally, it assigns ZERO value to the fast approaching inflection point – gold production.
Yes, feel free to bark the unsavoury but apt remark, “What the ….!”
And so you should.
The shares, which currently represent an extraordinary market anomaly, should be trading at 12pence per share (fair value) ahead of any production news.
In the meantime, all the bullish factors for a $2,000-plus gold price are firmly in place:
• Global GDP is anticipated to slide 3% this year; triple the slowdown in economic activity during the Great Recession.
• The US national debt in November surpassed $23 trillion. Gold rises proportionally to debt.
• The debt piles of countries across the world are rising fast as they wrangle the coronavirus.
• The US budget deficit this year is expected to reach nearly $4 trillion, after Congress pumped about $2.5 trillion into the economy to stem the bleeding from coronavirus lockdowns.
• A yield curve inversion, when short-term yields push higher than long-term yields, is a predictable recession indicator. On March 9 the entire US yield curve fell below 1% for the first time ever.
• A new round of quantitative easing, $700 billion in asset purchases, was changed to “unlimited”. The Fed also announced a $300 billion credit program for businesses and consumers. That was followed by a $2.3 trillion lending program announced on April 6, whereby the Fed can purchase up to $600 billion in loans, buy downgraded corporate bonds, and purchase $500 billion in bonds from state and municipal governments.
• The unfettered printing of fiat currency by the global Central Banks is gathering pace with each passing week.
Thus, disregard the ‘head fakes’ (MM antics), that will undoubtedly be popping-up as
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