Having worked at Sedex for a few months this year, I can tell you that
the biggest intersection of 8.2 feet of mineralization is very promising--this hole is , I'm told, the best hole ever drilled in the area outside of the actual Sullivan deposit. I'm surprised at the length...it looks very promising.
But having been in and out of this stock for a year and a half, I can tell you it runs and just as quickly collaspses. Watch for massive volume tomorrow--over 1 million shares no doubt, and if it gaps, it will come back at some point. Decide if you want to hold and average down or trade it. And stick to the plan.
To date, many shareholders, including myslef, have not been happy with the constant selling from those close to the deal. It has been ugly.
Now that these numbers are out--it maybe time to re-evaluate and keep an open mind. If this turns out to be the real thing in two years, it won't matter what you paid...anything at these levels would still be a gift.
Of course, that leap is stilla long way off. These holes, by the way, were not even the ones Sedex goelogists wanted to drill---Kennecot insisted on these targets at the end of a road if you can believe it.
It is believed the better target(s) will be attacked before the season ends Dec.1--we still have to get confirmation of that. It's possible they could drill all winter, but more likely to resume in the spring. Which means if you want to accumulate, you will likely get cheaper prices towards XMAS.
Junior mining is very speculative. But, I'd be lying if I said I'm not drawn to the potential of this---one just has to keep the imagination in check and stick to the facts with a "modest" amount of optimism.
Management is committed to finding the next Sullivan--they've never wavered in their belief that it was there and it was only a matter of time before it was discovered. If they are right, and this is only 1/3 the size of the original for example, this could easily be a $30 stock within 12 to 16 months. Remember, under the agreement with KNC, Kennecott shoulders all the risk and all the exploration cost,.. Sedex earns a 40% interest if Kennecott takes it all the way to preproduction...40% of a multi billion deposit is still alot without any further dilution to shareholders.
Bet it closes above $1 tomorrow.
One last note: the original Sullivan is amazing. It has provided lead-zinc-silver ore for over 100 years. It is a world class deposit of absolutely huge proportions. Cominco, which owns the mine, is down to a few years before Sullivan is dry. $20 billion worth of ore was there in today's dollars when it was discovered a century+ ago. This is what will provide the speculation fever on this stock--it is a great story!
And Howe Street loves a good story. If additional drilling proves it up, patient investors with nerves (and balls) of steel will be rewarded big time. Please note "if" is still a year to two years of drilling away. |
