Charles, I might very well make your wish come true. I did not have a chance to monitor the stock today, but I looked at the results, and the pull back under 7 was not a happy event. And this was the action of some mini gorillas (namely few relatively good chunks on the sell side).
Your are asking for a rationalization of the dichotomy between all the "good news" announced or expected to be announced and the action of the stock. I can list a litany of the potential negatives, but the fact remains that the low of 5-5/16 was a moot one, namely not much action at those prices, therefore the quality of this resistance is not assured. Technically, when a stock rebounds from a sell off, if it makes new recovery higher highs and the lows are higher lows, than the an "all clear" signal is given. Yesterday and today we failed on both counts. If the end of next week was not the AGM meeting I would have been out before the end of the day, but I'll wait until late Monday before you get your inverse buy signal (Namely I sell).
Now as to possible fundamentals behind the poor technicals, here is my reading. No one doubts that the metal is in the ores (but few would still "love" to have formal third party signature), but the recent visits to the labs by specialists from some of the Gorillas, contrary to accepted opinions, might have uncovered some problems with extraction costs (a figure I am still trying to estimate, even if just very roughly).
I'll give you an example. The recovery, we are told, improves by finer grind of the ore (and this is supported by experiments carried out at MAXAM where an increase from .05 to .2 oz/ton occurred after 8 hours of grinding). But grinding for 8 hrs adds a substantial costs, what if it is not just $5/ton but more like $15 or who knows how much? Try the following, go and buy sand (silica, I presume the main ingredient in the ore) and ask for 400 mesh powders and compare this to a standard 100 mesh powder, what premium will you pay. I have paid more than 500% premium for fine alumina in those circumstances.
Therefore, the prevailing assumption that the Gorillas are feeding may not be substantiated. This should be clear well before the AGM (this is the rewason for my "shaking automn leaf" attitude), thus early next week. If the Gorillas' appetite is reinvigorated, I'll stay (and you should sell, being true to the contrary indicator so well established by CL and Robert E). If the feeding frenzy (more than 400,000 shares) is not resumed, I'll be out (and you should feed).
Zeev (still shaking like an automn leave) |
