A couple of comments:
1. The Research Capital, Brenark Research, and others estimates are obviously preliminary valuations. Everyone (including the company, to their credit) is being conservative in order to manage expectations. At this point, I am looking at it this way - there are two valuations to consider: (1) the core asset valuation ($3/share ... Big Whopper petalite + rubidium, cesium and tantalum grades based on drill results to date) vs. speculative valuation ($3-$5+/share ... will only be known when the assays are in from Phase II Separation Rapids, Wolf Mountain, etc.). Worst case scenario, production start-up is possible in about 12 months ... thereafter, the company will have $5-6 million per year in after-tax profits to spend on exploration drilling, acquisitions, etc.
2. Friday's weakness was probably a combination of the market decline (increase in interest rates sparked the decline in TSE), margin calls/end of month selling to pay the bills, profit taking, etc... at times it looked like someone had to sell at the end of Friday at any price. More important, the key brokerage firms holding AVL (attended the AGM) are DS and Midland. DS was net +7500 on Friday, after some profit taking on Wednesday, whereas Midland was only a net -4500, Midland was not taking profits on Wednesday. This does not indicate that anyone was disappointed in the resource estimate - after all, at 7 million tonnes, the projected mine life could be 35+ years (assuming 200,000 t of ore is processed/year).
Phase II Big Whopper drilling starts today + watch for the start of drilling on Wolf Mountain.
DRT |
