Hello Russett
The map to which you refer is an old schematic claims map used for years but of course updated to include Yamba. Interestingly, it does not seem to include SUF's claims shared with GGL south of MPV's ground. It does however show the schematic location of the newly discovered kimberlite up near the northern claim boundary with Tahera. The map is not a Yamba Lake property map. It does not show the physical property in any detail nor does it show geophysical or geochemical targets and trains.
A great deal of effort has been spent outlining all sorts of kimberlite and gravel targets on the Klipspringer property. I personally would like to see the company make a similar effort to the degree possible; on our Brazilian properties and especially on our Yamba Lake claims.
Present maps with site details and targets. As you say Russett, Teck left a great deal of information in Brazil. In addition, I have quite a few photographs from Canabrava sent several years ago which show quite a few apparent pipes, all of which would be nice to see schematically at least on our property maps. HB spent several million on re-sampling and geophysical surveys over the past twelve months, why isn't all that information presented in the same way Klipspringer is?
It is certainly understandable that the company would focus the majority of its efforts and capital on our RSA assets as they promise the greatest assurance of short-term revenue growth and therefore theoretical fundamental share value.
It also makes perfect sense that the company would spend a reasonable amount of effort in Brazil where exploration expenses may be modest because pipes tend to be very obvious and the possibility of short term profits from low cost high volume alluvial deposits appears to be promising. While shareholders should remain aware that despite the multitude of pipes, with the apparent exception of one that DeBeers may be developing, no Brazilian pipes have ever been found to be economic, and that is in the hundreds of years that these deposits have been known.
While SUF may discover another exception, perhaps even several, keep in mind where 10 of the worlds economic pipes HAVE BEEN FOUND.
Similarly, if Camafuca now offers low cost production, reasonably immediate if modest profit potential, and a safer investment climate, I will not criticize or question the wisdom of spending some capital to put this asset into production. After all, it will support immediate earnings growth which fundamentally in theory, the market should be considering in assigning a reasonable share price multiple to SUF.
However, we all know the difference by now between what the market should be doing and is doing.
Like a broken record, I will repeat what I have maintained for years… Ignoring immediate exploration advances in the NWT can only be done to the detriment of our share price.
Fundamentally, earnings should be supporting a higher share price, but we all know that they simply ARE NOT!
While at some point we can all reasonably assume that they will, history has proven repeatedly that Canadian economic pipe discoveries WILL ignite market enthusiasm, NOW, like no other effort, expenditure or investment the company can make.
SUF can spend hundreds of thousands of dollars on PR and promo tours and the market will respond to a degree, but nothing like what will happen upon good Canadian pipe discoveries.
SUF is reasonably liquid and for the sake of a modest $2 million or so which the company can easily budget without adverse implications, the Yamba Lake summer drilling program should and MUST be announced shortly and pursued aggressively.
All we need is the discovery of one pipe with good numbers over the summer, and the fall announcement of multiple coincident mid-lake geophysical targets and geochemical trains, hence multiple and exceptional winter drilling targets, and market speculation in SUF will be ignited. Combine that pipe discovery news with confirmation that one or both of the T-10 and Ptarmigan pipes have proven to offer economic potential, and we have a story that the market will AND I MEAN WILL, follow enthusiastically.
Earnings are great, important and I am all for them, but they do not excite the market.
WSP and ABZ have no earnings and in the latter case, will not for three years, yet ABZ trades for more than twice what SUF does. Why?
You may as well ask why Internet stocks have capitalization in the billions? That's just the way it is people... So why ignore the simple facts of life?
Until SUF management understands and exploits this market fact, we will continue to see our share price languish, or at the least, trade at multiples considerably lower than the sector standard. As of this morning ABX has a P/E multiple of 20.59 down from a much higher figure. PDG is at 27.23. An SUF P/E of 20.59 would see the shares trade at $16.67, so why aren't they? Market psychology and first world assets.
Keep this one last fact in mind. Management can ignore all of my whining and crying and hair pulling. They can ignore the market evidence that I continue to quote. They can listen studiously to Confluence's sober and sage advice, but here is a fact that perhaps even they will not ignore.
We all know that diamonds whether mined in the RSA, Brazil, Russia or Canada, are essentially all the same. A one carat D flawless mined in Australia is exactly the same as one mined in the NWT, or Angola. There is no difference.
However, North American jewelers such as Birks, are now specifically marketing NWT diamonds and demand appears to be growing.
Why?
The stones are exactly the same commodity...
newswire.ca
The fact remains however, that people/buyers may be buying into a marketing concept. Call it naivete or call it what you like, but people have preferences and they are excited by positive ideas and images and put off by negative ones. Retail customers are demanding Canadian diamonds and there is no denying that the market rewards companies with Canadian pipes.
Call it irrational exuberance, call it what you will, but the market will not reward multiple third world discoveries as much as one Canadian discovery. That is just a fact of life.
I don't suggest for a moment that SUF should ever abandon it's primary focus on developing fundamental value. However, I do not believe that it is in shareholders best interest to have our NWT plans side tracked or marginalized. The company has a denied and unrealized desperate need for discovery and development of the only thing that will excite immediate enthusiasm in our stock.
CJ, please shake off the collective inertia that seems to have infected your NWT exploration efforts for the past two years. Get Howard into the mosquito infested tundra (field). Start making announcements about what you have found so far, what you intend to do today, tomorrow and next week…
Look alive!
Excite the market…
Regards
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