Hi Claude, You mention the market cap, and to be sure that is always a consideration when assessing a stock, as well as all the other factors management, properties, finances etc. etc. but it is not the only consideration. For one thing, when you have a small cap and you advance the properties to where institutions may be interested, they do not like to touch a small cap company where the liquidity would be a problem. The other factor is the vulnerability to a hostile takeover bid. On the other hand, I recall not all that many years ago, a stock with more than 5 million shares out was considered a real pig. In an ideal world it would be nice to have a 5 million cap stock with a real bonanza on it's hands and you were in at .25.:-)
I remember Golden Sceptre and Goliath j.v'd with Noranda, when they discovered their Hemlo Gold deposit,(one of my really big wins) or Corona at that time, also in Hemlo, they'd just done a rollback.(good 'ol Murray Pezim was big on pigging out a stock, and then rolling back for the next run). Small cap compared to today, but it was the discovery that sent it skyward.
I will say this, Claude, when I looked at Queenstake in the past I was not enamored because of their share structure, but even more, because of their style of drilling, a hole here and a hole there on this property and that, too scattered an approach for me. It seemed to me at the time they were more interested in playing the market up and down then really getting down to the business at hand. Bobby Miller was always good at "mining" the market and I felt at the time that there focus was more on that, then on building a real company, so I never bought. On the other hand, I missed some good runs up and down in spite of the share structure and in spite of the style of exploration. So in the short run, the people who rode the wave up and down were the winners, if they were fleet of foot. In the long run that would not build a company that I wanted to invest my money.
HOWEVER, there has been a sea change since then in Queenstake, and I see them very well organized, doing j.v.'s on a lot of the properties and looking to do a lot more(they have a very large land position in "Hot Spots") and then there is the Guinoloza, which remains to be seen whether there is value there or not. I also note they are talking to several majors on the Que Brada Grande property and according to their own officials, there will be more j.v.'s on more of their properties. This preserves the capital so that they can survive for at least 3 years without needing anymore financing.
In summing up why I think it is a good "bet" they're making the right moves, they have enough financing, good j.v partner, looking for more j.v's on more of the properties, and I think a better than average shot at a discovery and the management seems focused on building a real company. In other words Mikey likes it!:-))
As far as SWG goes, from the cursory look that I had, and what you have told me, it sounds like it is a good investment, but a lot of the players here are smaller players and can not afford, or are not interested in a company when it reaches those levels. Don't forget, Claude, that you have all levels of experience here, and all levels of finances. There used to be a saying in Vancouver that if it went past 5.00 then it was a sell off as most of the players felt it was too rich for their blood.They felt that all the spec had gone out of it. That was certainly not always true, but the great majority of them felt that way. At that point generally eastern investors and funds were buying from the speculators for the long run investment. I think that mentality is still around to a great degree. Usually if a company like SWG can get to the point where they have an actual bankable feasibility study in their hands, and are able to obtain the financing to build the mine, the stock then is mainy held by long term investors and not the speculators. There is another bug as well, which probably won't affect SWG, because they have other projects, and that is, if they only had one property once the building of the mine stage is reached, the stock usually goes down for a while 'cause everyone knows there will be no spec action anymore and it will take time before it starts to pay dividends. At that point it is considered a "true" investment. I must say that if I had known about it when it was $2.00 I would have been VERY interested.
I really think these forums play to the speculator. They like penny stocks with potential of multiple returns. The reason so many lose so much is probably more to do with not understanding which ones are just a "market" play, and which ones may actually have real potential for those high returns. Even then you can be wrong. I remember it was said about Murray that every year he would take each of his myriad of stocks out for a walk, up and down, and then dormant for another year, true "market plays.:-) Still, even he had some outstanding successes including Corona at Hemlo, the win over Lac, and Eskay Creek, although I think it was Nell Dragovan who led him to both of those properties. He did know how to run with the ball, so to speak. He taught me a lot the hard way by some miserable losses and some great wins. You always hated him one moment and loved him the next, depending on which end of the play you were on.
Sorry for rambling, Claude, but I tend to do that.
Cheers
Shirley |
