Wouldn't it be great if it could have been left halted and opened up in 2 years with a producing mine in Peru and revenues in excess of $50M/year. No volatility, no vague market to worry about, no daytraders trading, no impatient investors with the 'Vancouver mentality', just a monster cash flow at the end of a long wait.
But we have a publicly traded company so it trades...
Nobody is pleased with the stock price unless they're first-time buyers or they're averaging their price down. But we know the reasons why the price is lower than we'd like.
The market for mining issues on the VSE is currently soft. Most local houses are unwilling to take the lead in the soft market. Everyone wants someone else to step up to the plate first. It's just a matter of finding the right investors who can take a long term view on the project. Hence the recent trips by management to NY and Toronto... A good portion of the selling since the opening was a group cashing out of ITG to prop up their own NASDAQ-listed gold play. As for the lots of 5K popping up - there's been a lot of traders on the stock because of the large bid-ask spread that was found just after the halt.
More importantly: The full story on the property was not allowed to be released to investors. As I've stated previously, the VSE allowed only portions of the mining engineer's report to be released: the costs for the feasibility study and mine development, and a statement of the proven and potential reserves, but nothing on the expected financial return on investment from the project. I understand that this VSE ruling is being contested on a couple of fronts.
As investors, it is in our interest to know the full details of the third party report that has been circulated among brokers who were solicited as underwriters for the financings.
I am surprised you referred to Berenguela as "the Peru mess". Berenguela is a world class project supported by the well regarded people at KCA. This is the project that will make Tournigan into a producer. The reserves are there, supported by years of records. No gopher holes needed to show this. I think it speaks volumes about the capability of ITG's management for them to capture this project when Au was headed south as it was last year. Gold exploration outfits are going under because of the inability to finance, and Au producers are closing mines. ITG will have a mine if all goes as planned.
There are still investors interested in Tournigan's West African projects. In my opinion, any work there is just gravy, and a potentially rich gravy, and will complement well the Peru project given KCA's experience in Au leach operations. My principle interest in Tournigan is Berenguela.
Is there a chance that ITG will fail and not get the financing they need for Peru? Sure that's a possibility. Maybe the geologists report comes out and the mining engineers report is allowed to be distributed, and the market is such that nobody seems to care about a $3B asset in Peru - for whatever reason. But look at the way the deal was structured. In the contingency that they can't raise a sufficiently large sum to finance the feasibility in one lump, ITG can make minimum monthly payments toward the feasibility study and to secure the project. At a minimum this will buy the necessary time to find further financing and/or until market interest returns to metals and mining in general and to this stock in particular.
Will the stock hit .40? I don't know, maybe it'll go to .25? Or maybe .50 was the best buying opportunity for Berenguela that we will see.
Maybe in a few years nothing will be made of copper or silver or contain manganese. Maybe there'll be no PC boards or electronic components or batteries. Maybe everything will be plastic. And all of these metals will sell for nothing at the bottom of an endless spiral of commodity price deflation.
And maybe Chuca Marsh will become a Nobel Laureate. |
