Another Investor Guru update:
May. 2, Warren re: Q.CLPZF Colossal Resources
Dear Mr. Guru: Thanks for your good research and honest commentaries again. One more factor involving Colossal's down fall is that the Zairian Civil War is only a few hundred miles away. That war was overflown from Burundi. Some investors are scared that it may spill over to Zambia too.
I guess only "God's Kingdom" could do away with the wars in Africa. Meanwhile all investors, large and small, must take chances investing in this resource-rich continent. Good Trading,
RESPONSE: We came to the natural conclusion that the civil war in Zaire must be affecting other close by African nations as well. However, we have been told that Zaire and Zambia are night and day, with Zambia being stable and Zaire being unstable. Also, cobalt prices have edged up a bit lately. There are many African countries, all with individual customs and politics. We do not know enough about African politics to have a strong opinion about how much one country's political instability is affecting those nearby. It may explain some of the pressure on Colossal's price, as you suggest, but aggressive short selling probably has more to do with it.
We agree totally with your comment on mining opportunities in Africa. If a mining company had equal chances of finding a resource in North America or Africa, they would choose N.A. The fact is that much of the big deposits in N.A. have probably already been found. To find large "blue sky" mining potential you must go where exploration and mining offers the highest reward potential, which is Africa, South America, the Pacific Rim etc. These areas also present the greatest political risks. The name of the game in junior resource stocks is, "high risk goes hand in hand with high reward".
We still believe in Colossal's long term fundamentals and that the market valuation of their proven Nkana Zambia cobalt-copper assets is very low. However, we have chosen to not yet average down in Colossal until trading in CLPZF, and the junior resource sector for that matter, sorts itself out and starts trending up again. |
