OK, I'll be less blunt. What catalysts for sp appreciation are there?
1. Increasing share count is diluting future upside. They have clearly indicated more dilution is coming in the latest news.
2. SC is the main project and is on the shelf, with minimal office and field activity. It is a high capex project with modest IRR, as per the official numbers. Given operating mines are on the block at discounted prices, and Teck has a publicly stated priority to develop their projects, there is no meaningful or realistic near-term timeline for SC development.
3. VD and Carmax need money to advance (in reference to 1.), and any timeline for incremental advancement of these projects is both necessarily down the road a long ways, but is also likely to be small.
4. Mineral Mountain is an early exploration play, which means money sink with a chance of something exciting.
5. Even if you signed up for the new plays in Arizona and BC, the way to make money off of them is not to hold the "old" paper- there is clearly a recapitalization that needs to happen to make this company viable for the next promotional-exploration cycle. They need to reduce the share count and attract a cohort of excited investors. A 10 or 20:1 consolidation would clean up the share structure, and the recap would let insiders participate at optimal levels with warrants. Current shareholders are likely to see what so many others have in similar companies in this long bear market: dilution and further erosion of value associated with this recap. So if you really want to play VD and the other properties, why hold now? The time is coming to buy into that dream.
6. Finally, majors run first in a commodity rebound. We've seen some of this in the producers already, with TCK.B almost tripling, FM doubling, etc. If you are rational, why park money in a (at best) long term story? I'm not talking about day trading, I'm talking about a well-known market swing that will take months to unfold, if it really is a bottom (I think it might be). There will be a time down the road when the juniors will run, and CUU might participate, but that is no where in sight. If everything continues up, the autumn might be great as some news emerges from the few companies actually drilling or looking at rock.
Meanwhile, CXM is in a dire situation financially and CUU is running out of money (while spending $500K+ per year on salaries). EXG, the previous exploration vehicle for the CEO (and his part time occupation as the BXX CEO) is now moribund in terms of cash and projects.
With PDAC this weekend, the next five months are potentially a slow decline in interest in junior mining stocks like CUU. The risk of a summer doldrum decline in sp is good. So even if you really love this story, odds are you can buy into it for less in August.
I think the trading with CUU has been telling. Some retail folk have been getting out, sometimes abruptly. There are buyers, who are taking the risk that a catalyst will give them a return, perhaps of only pennies in this trading range.
So, a long way of saying: is it rational to invest when the evidence is so clear? Think of all the imaginary catalysts promoted by forum participants over the past five years. So much hope routinely dashed by reality. Better yet, when have the negative views (some call them bashing) been wrong? Not often. Five-plus years and counting.
The saying oft-quoted is something like: doing the same thing over and over again and expecting different results is the definition of insanity.
I chose to be less negative in my brief comment last night and thought that insanity in this case might better be characterized as delusion, which implies an otherwise healthy state of mental being. |
