Trading the stockmarket (NO Referrals)

nero120

nero120

nero120

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BY THE BEARD OF ZEUS!!! MC is a goddamn gift from the gods! 2.4m oz!! 750k indicated!! 1m oz open pit potential confirmed!! And it's not even october!! And most of the concessions are as yet undrilled! How this is struggling to break £2 is beyond me, we are sitting on one of the most economical and high grade gold resources in the world. Hold on to your butts, it's gonna be a wild couple of months! :D
 

ntg

ntg

ntg

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nero120 said:
BY THE BEARD OF ZEUS!!! MC is a goddamn gift from the gods! 2.4m oz!! 750k indicated!! 1m oz open pit potential confirmed!! And it's not even october!! And most of the concessions are as yet undrilled! How this is struggling to break £2 is beyond me, we are sitting on one of the most economical and high grade gold resources in the world. Hold on to your butts, it's gonna be a wild couple of months! :D
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The following is not meant as a personal thing, just advice in general, and it applies to a lot of people in here:

Just because you can't understand why a share price is moving (or not moving as in this case) doesn't mean there is no reason. It just means you haven't done your homework properly. In general, if you can't understand a big price swing that does not mean the share is cheap/expensive. A lot of people see share X drop 50% and go for it because it's "cheap", since they can't see any obvious reason why the price dropped. It doesn't always have to be that way. There is always a reason and many times it may be a good reason for you to stay away as well. Don't invest/trade on price moves that you can't understand. There is always someone else on the other side of the trade, someone that you _must_ believe is smarter than you, because they usually will be. Never underestimate the opposite side of the trade. Unless you can convince yourself that you have an information edge (or an investment horizon that justifies buying higher/lower than them) over the person opposite you, then you shouldn't make that trade. Being contrarian and successful at the same time is really hard, like super really hard.

As far as miners go, the overall reserves can mean something or nothing in all honesty, it's the proven reserves that hold the most sway. Besides that, proven reserves again in itself doesn't mean much unless you can actually extract them in a cost efficient way. There are many pits that are being reopened the last few years because back in the 80s or 90s it was uneconomical for them to be dug up.

I don't know anything about MC but the following questions should give you the answer to why it hasn't moved beyond £x.

What's MCs cost per oz? The real cost per oz, not the rosy one (best case scenario for the closest gold to the surface) the company will tout around. How does it compare to other similar miners? Has it ever produced gold from a gold mine before or is it a junior? What is the quality of gold, much waste or not? Are there any local disputes/concerns with tribes etc?

The biggest risk for a miner is when it switches to production. That's when things can go belly up as any failure or delay in the production phase costs real money (as in on top of the budget, which means they will have to raise more equity or debt, which means a price dillution). So, until they start producing the stuff they are high risk. Let alone the fact that many miners like to locate reserves and sell up _before_ production, because the production phase is less lucrative for them (lucrative in the sense of cost/benefit and given their personal return on equity).

I hope this helps.
 
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nero120

nero120

nero120

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kgi said:
The following is not meant as a personal thing, just advice in general, and it applies to a lot of people in here:

Just because you can't understand why a share price is moving (or not moving as in this case) doesn't mean there is no reason. It just means you haven't done your homework properly. In general, if you can't understand a big price swing that does not mean the share is cheap/expensive. A lot of people see share X drop 50% and go for it because it's "cheap", since they can't see any obvious reason why the price dropped. It doesn't always have to be that way. There is always a reason and many times it may be a good reason for you to stay away as well. Don't invest/trade on price moves that you can't understand. There is always someone else on the other side of the trade, someone that you _must_ believe is smarter than you, because they usually will be. Never underestimate the opposite side of the trade. Unless you can convince yourself that you have an information edge (or an investment horizon that justifies buying higher/lower than them) over the person opposite you, then you shouldn't make that trade. Being contrarian and successful at the same time is really hard, like super really hard.

As far as miners go, the overall reserves can mean something or nothing in all honesty, it's the proven reserves that hold the most sway. Besides that, proven reserves again in itself doesn't mean much unless you can actually extract them in a cost efficient way. There are many pits that are being reopened the last few years because back in the 80s or 90s it was uneconomical for them to be dug up.

I don't know anything about MC but the following questions should give you the answer to why it hasn't moved beyond £x.

What's MCs cost per oz? The real cost per oz, not the rosy one (best case scenario for the closest gold to the surface) the company will tout around. How does it compare to other similar miners? Has it ever produced gold from a gold mine before or is it a junior? What is the quality of gold, much waste or not? Are there any local disputes/concerns with tribes etc?

The biggest risk for a miner is when it switches to production. That's when things can go belly up as any failure or delay in the production phase costs real money (as in on top of the budget, which means they will have to raise more equity or debt, which means a price dillution). So, until they start producing the stuff they are high risk. Let alone the fact that many miners like to locate reserves and sell up _before_ production, because the production phase is less lucrative for them (lucrative in the sense of cost/benefit and given their personal return on equity).

I hope this helps.
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Sure, good advice but don't worry I've done a bit of homework. Edison Investment Research give their London based average valuations for Inferred and Indicated ounces as $22.39 and $129.32 respectively. 30.5m shares in issue.

From todays RNS:
  • initial open pit Mineral Resource of 954,000 oz gold at 3.6g/t
  • Underground Mineral Resource of 1,418,000 oz gold at 5.5g/t
  • Indicated Mineral Resource 751,000 oz

so that gives us a resource based valuation of $4.37 or £2.69. That's without even taking into account the relatively high average grade (low-sulphidation vein systems and grade increasing with depth, some bonanza grades encountered), open pit potential, Nicaragua's developed infrastructure, pro gold-mining government, low labour cost.

We won't have a firm idea of extraction costs / economics until the PEA is released in October, but La India compares very favourably to B2Gold's operation and it appears we have higher average grades than them. With a number of concessions yet to be explored and the old russian mine still to be reopened there is plenty of upside and it seems to me this share is still massively undervalued. Take into account the rising price of gold and the potential imminent announcement of initial production and the picture looks very rosy indeed.
 

ntg

ntg

ntg

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nero120 said:
Sure, good advice but don't worry I've done a bit of homework. Edison Investment Research give their London based average valuations for Inferred and Indicated ounces as $22.39 and $129.32 respectively. 30.5m shares in issue.

From todays RNS:
  • initial open pit Mineral Resource of 954,000 oz gold at 3.6g/t
  • Underground Mineral Resource of 1,418,000 oz gold at 5.5g/t
  • Indicated Mineral Resource 751,000 oz

so that gives us a resource based valuation of $4.37 or £2.69. That's without even taking into account the relatively high average grade (low-sulphidation vein systems and grade increasing with depth, some bonanza grades encountered), open pit potential, Nicaragua's developed infrastructure, pro gold-mining government, low labour cost.

We won't have a firm idea of extraction costs / economics until the PEA is released in October, but La India compares very favourably to B2Gold's operation and it appears we have higher average grades than them. With a number of concessions yet to be explored and the old russian mine still to be reopened there is plenty of upside and it seems to me this share is still massively undervalued. Take into account the rising price of gold and the potential imminent announcement of initial production and the picture looks very rosy indeed.
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I don't know if you have experience in investing in junior miners, but the pre-production phase is _always_ undervalued, purely due to the high risks that switching to production can hold.

The risks associated with enabling production are severe and should not be underestimated. Any setback at that point can push the whole project back months, cost a lot of extra money etc. which will burn a hole through investors pockets and many have painful memories of such events. Assuming everything else is well with your miner then the argument I'm supplying here may probably explain part of the price lag.

Also, that resource valuation needs to be adjusted. You need to think whether the miner should be valued on NAV (most likely) or some other metric. How are other peers trading against NAV? How long ahead will you project your share target price? etc.

Just because something is worth X in NAV doesn't mean investors will give it that price.
 

silversurfer

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LSE gives prizes every month, seems as good as any other. Shows all the mechanics, people have mentioned shareprice.co.uk for mobile maybe
http://game.lse.co.uk/log-in.asp?from=/main-game.asp?game=nrnq0icv22
Just chose these for this month, I never bother to use them to trade as I think its not realistic vs real money.

UYgC1.png
The reason some are in red so much is the spread cost

Another stock pick I took 6th July was these
0ywrr.png

I thought at the time CNR was probably a buy, 95 was cheap heh:o
 

nero120

nero120

nero120

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kgi said:
I don't know if you have experience in investing in junior miners, but the pre-production phase is _always_ undervalued, purely due to the high risks that switching to production can hold.

The risks associated with enabling production are severe and should not be underestimated. Any setback at that point can push the whole project back months, cost a lot of extra money etc. which will burn a hole through investors pockets and many have painful memories of such events. Assuming everything else is well with your miner then the argument I'm supplying here may probably explain part of the price lag.

Also, that resource valuation needs to be adjusted. You need to think whether the miner should be valued on NAV (most likely) or some other metric. How are other peers trading against NAV? How long ahead will you project your share target price? etc.

Just because something is worth X in NAV doesn't mean investors will give it that price.
Click to expand...

Of course, it's just a very simple resource based valuation. The true valuation (if one can even be made of an explorer) depends on many more factors, but you do what you can and then you take your chances. Either way, condor looks like it's heading in a very promising direction and I'm happy to wait it out until the end game.
 
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silversurfer

silversurfer

silversurfer

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Simon said:
Do you only do fantasy stocks or real too SS?

GKP rumours about, up to 245 now
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I do have the real stocks but not massive amounts like some manage, I think most of the learning is dealing with the loss of money before it actually goes up. Like I used to own TEP but I sold too early, no game can really teach that. VGM was way too low, Im not in profit there but I did basically buy all those stocks for real or add in more.
ABG I sold last year about this time, bought too early in the spring but also it seemed stupidly low at 300 so I got mix of trades some good and not

GKP I see at a top here, raising my stoploss. Probably have zero now
nope quick chart look, not appearing super positive so I'll cash out I guess. Good vol not enough to convince me since I have Genl or hoil instead, they are related

jmhduck said:
What sort of prizes do LSE give?
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hundred quid or so, bit of incentive to make it a bit more real

The further into the future the production is, the less its accounted for on the share price. Stocks are supposed to estimate earnings maybe 5 years ahead or so but that is also a function of fear so its possible to find people paniced and the company is valued at its cash balance and the assets are free - in theory
Hoil was free I reckon, maybe CAD. VGM is cheap because Fiji has had revolutions in recent years, its risky without knowing their culture plus the mine is not cheap to run but still it went 220 to 20p, thats almost free :D


BP topping out maybe, I would like to buy 430p instead
OcXCE.png
 
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