Hi, Gerry
I had a look at TVI and also took a position a few days ago when the daily trading volume was over 1 million shares. Two major reasons for the share price decaying, assuming everybody knows, are: (1) people lost interests in juniors after the Bre-X mess; (2) price of gold has dropped to $340 level from $380 level.
Seems to me, the only interesting project is the Canatuan mine. The company sold a lot papers to the market early last year when the stock was hot. They pocketed over $30 million. So I guess right now they should have enough cash to last for a while. In addition, they have a very small scale production at the Canatuan mine, which can generate a monthly cash flow of $100,000. Just hoping the gold price will not drop further. When the Canatuan mine start full production, base on the projected cash flow, it is a steal to buy shares of TVI at current price level.
The King-King project, in my opinion, is dead. The gold and copper grades are too low, and the mine construction costs are too high (over $600 million). Even if gold price is $800 an ounce and copper price is $2 a pound, they probably still can not get the financing.
When I first saw the price-volume chart of TVI, I immediately thought of another stock, Accugraph (T.ACU.A). If you pull out the price-volume chart of T.ACU.A and compare it to that of TVI, I am sure you will be amazed that the two looks very, very similar. I bought some shares of ACU.A when the share price was below $0.5 and nobody wanted the shares. One day, when a good news came out, the price jumped to as high as $1.9. I don't know if there is a similar thing that can trigger a sudden price jumping of TVI. I bought TVI because the compay has something and my feeling is somehow the share will be traded back at $1.2 level. So I will be patiently hold it for a while to see what will happen.
Buy low, sell high. On today's crazy market, the blue chips have no top, while the juniors have no bottom. I have read all the posts on this thread, people had tried to define a bottom for TVI at various price levels. Here, I want to say that the 40 cents level must be the bottom unless the price of gold bullion drop all the way to $250 an ounce. It might happen. I clearly have no idea where the gold bullion price will go. So that might be the only major risk associated with this stock. |
