Hi gemsearcher,
I agree the Messina multiple will be higher than 4 times eps. Then there is the SUF multiple,...earnings dwindling for the next 2-3 years,...most projects with considerable uncertainty in them. Exploration projects all over the world eating up what cashflow there is,...hence the low multiple due to too much uncertainty. Multiples are unfortunately determined by the market, especially by those shareholders that sell. The poor SUFfering hamsters that hold, get squished :-(((((((((
Concerning Brazil: They have tromped around the property to map and detail the potential alluvial and hard rock diamond sources. They have organized the data and setup the office and lab. Sampling is delayed until they get exploration permits,...no one seems to know for sure how long that will take,...so we hurry up and wait. One should note that De Beers seems to be diverting attention from Brazil to other projects around the world. Of course De Beers wants big projects, whereas SUF thinks smaller and I believe hopes to make the sum of many small projects just as profitable as one big one. Of course, these are simple hamster thoughts,...
Klipspringer: They are looking for cheap sources of diamonds. Along with the fissure testing, they are mapping and testing the extensive gravels on the properties. These gravels (just as in Brazil) could hold extensive resources of high valued diamonds, and are much cheaper to mine than fissures. Unfortunately M1 (40% SUF) continues to drain precious processing capability leaving less for 100% SUF material.
I seem to recall a news story that several diamond explorationists were killed in Angola over the last week by Unitas. Not very good for the JV on Camafuca. Ashton was very upbeat on Angola at the PDAC. They said security was being relaxed and costs to mine their pipe and alluvials were coming down as the country was slowly getting back on its feet. Perhaps that statement was premature.
Hamster conclusions: SUF has projects that will make money, but has two toes in the producing camp (money flow) and most toes and feet in the exploration and development camp (money burn). Hence we are back to Vaughn's assertion that exploration success is the only thing for the immediate future that can boost the flagging share price :-(((((( |
