Marie on AAU.A,
First off hi, how are you doing. Yes there is RISK, it is a gold mine and this carries all sorts of RISK, also you are never sure about any information, don't get me wrong not being nasty but these stock are tough sometimes, the company has been a producing mine since the turn of the century, it is located in Mongolia area of Russia, what is happening now is that they are going in and looking at strip mining versus shaft mining, there are proven reserves and with commodity prices the way they are presently and major gold producers looking for large reserve deposits the mine "could" be economical, it probably will be. This has created the present interest, it has been a fairly long haul the company has been over there for 2 to 3 years making sure play was economical, they have had major gold companies go over there and look at the play and believe one will make a bid for the property, actually there at 32 million shares outstanding with current reserves and a purchase price of $15 U.S. an oz that equates to 4 to 6 bucks a share depending on quantity and quality of reserves, if someone decides to but them those are the numbers, the market is indicating that someone is willing to buy them but the market is not always right, now onto the big question what should you do, well first I am a nice broker I am not the guys you read about that are typical of Alberta, the lions share of my business is blue chip investments, so what you should do is buy NCE petrofund that yields 12 1/2% and sleep at night, (I qualify that by saying I was also floor trader on the ASE for a number of years and know this side of the business as well) but since we both know you will probably buy the mining stock wait for low volume days and be patient stock has tendency to go on runs then fall back, I think there is a story here, today was a tough day for gold stocks, gold was down 4 bucks and volume was still strong, stock will have to break through the 2.50 barrier and there is some selling pressure to contend with before this happens, you are probably 3 to 4 months away from a deal "potentially" being signed, so you can take 2 strategies, one is to trade stock buy low sell 30 cents higher and hope that you own it if deal does go through, or you can take a position and forget about, either one is alright, I don't think your downside is below 1.80 so it won't hurt is deal doesn't happen, most of the recent volume has been a mix of retail and institutional and they are betting for more to come. Hope this helps, if you are impatient then buy half a position and wait to see if stock weakens to buy other half, it may not but at least you will have some, and some people say I'm long winded don't understand what their talking about. Good Luck Art, also there is money to be made in Cachet - CCE it's a tech stock that will be in this range but will one day pay handsomely. |
