Claude,
I tried to send this response last night but SI apparently closed down before I finished but it still seems appropriate this morning.
I seldom post on company threads but I can't resist tonight. Most of my small position in IWA was taken after the announcement and after I became convinced that they had stumbled on to something with major potential. It never occurred to me that the announcement of the "application to the British Columbia Environmental Assessment Office to develop the Cariboo gold project" was of important significance except that, if completed, it could put a floor under the stock price if the potential of the new discovery evaporated. After reading your comments to Dan, I looked at a chart of IWA and the releases announcing the discovery of the bonanza ledge and the application and it seems clear to me that discovery was the stimulant for the rise in the stock price. I see the announcement of the application having some impact but of very limited significance. According to my records, it came after the price move was well underway.
Perhaps we are both seeing what we want to see. I'm reminded of a chart that a gold fund manager presented at several mining conferences that I attended. It shows the price of stock rising during the initial exploration
phase to a peak and then dropping back to a relative lower level when the ore body is defined (or off the bottom of the page if an ore body isn't defined). It shows the price remaining at the low level until the construction of a mine is initiated. The price is shown to then rise to a level determined by the profits from the completed mine. I would
suggest to you that while the chart may be an oversimplification, it reflects the fact that during the early exploration phase (development phase for a technology company), a companies stock price is based on perceived
potential and real assets (and earnings) become controlling only after the project becomes a success and is on it way to becoming a mine. I would further suggest to you that, with the discovery (accidental or whatever) of the ledge, IWA moved back to the initial exploration stage (if it had ever gotten out of it) and was being priced accordingly. Its price will reflect the potential that the market sees for the discovery. You seem to believe that the price of a stock is directly related to some value that can computed based on real assets and, since the discovery has only potential, you see it as having relatively limited value.
You and Mr. Holland of the CDNX seem to be focused on the application and the fact that it wasn't preceded with the "required" study and drill indicated resource. I believe the market and majors that have shown an interest in the company/project are focused on the bonanza ledge and its potential and I believe the chart reflects this interest. Hopefully, we will learn more about the potential of the discovery very soon. The release to the assays for the 5 drill new holes drilled with the large drill should be very enlightening. I suspect these results, if released before the halt in trading is lifted will determine the direction of the price of the stock.
FWIW, I used the charting capability found at:
askresearch.com
Cheers,
Larry |
