Bamako's Blog: Otobong (see reference to Avalanche Networks AVH.V)
Plexmar Resources: down but far from out
Friday, September 08, 2006
Back from Beijing and more than delighted to be living in Canada. Life in Beijing is hard but then so it is for most of the world's people. Outside of abjectly poor parts of the world, much of the world is like Beijing, caught in a maladroit intersection between development and underdevelopment where life for many is both vicarious (in the sense of imagined lives) and precarious. A cross section of Beijing could be overlaid with a cross-section from Lima, Sao Paolo or Delhi, so striking are the similarities in terms of physical features and human struggle.
Today was a sharp down day for Plexmar Resources. As I mentioned in my earlier blog on Plexmar, the stock was technically overbought, and a settling back of the stockprice can only be healthy for the forward movement of Plexmar shares. Also as I mentioned, the stock won't be drilling until October so unless there is significant intervening news, the shareprice became untenable at $1.20. Having said that, Plexmar has always been a rather volatile stock. Since January, there have been several quick ascents followed by sharp declines, but over the longer term, the shareprice always advanced higher. Easy to forget on a day such as today the fact of the stock's stellar performance since opening the year at six cents.
At this point, Plexmar is basically a waiting game play. Geophysics is apparently delayed a couple of weeks and assuming no further delays, then drilling of the highly prospective Bolsa del Diablo property should commence sometime in October. In the interim, there should soon be news of the formalizing of terms regarding the company's Ecuador acquisitions. Word is there may be other and new significant news relating to the company's continuing surface exploration of Bolsa.
Much hay has been made of insider selling on the Plexmar bullboard and of course everyone prefers insiders to continue to buy and buy more of their company's shares. But this is the world of stocks and insiders are entitled as anyone else to take profit. That they have a certain advantage in reference to options and private placement participation makes insider selling a bit of a cause celebre to a lot of retail investors, worried about the inherent value of the company's potential, and despite that such worry, in this case, is largely invalid, it is certainly understandable.
I won't reiterate all the reasons why I believe Plexmar stands an excellent shot at a major discovery except to proffer again the points that the company has come up with stupendous sampling results over a very large area and that high grade gold shows up in all three categories of surface medium, including volcanics, intrusives and at surface. I will say again that for high grade gold to appear in all three categories, as it has, is exceptionally rare and a very good indicator of a significant underground system. So long as mother nature does not play a dastardly trick that completely confounds the data accrued thus far, then I think the odds are very good of Plexmar striking a lot of gold.
In the interim, simply mention of the word Ecuador is sufficient to fuel great interest in a stock. I am in on the pp of a shell called Avalanche Networks, which will convert from technology to resource company, and inevitably a company name change. Avalanche's new management just returned from Ecuador and that is enough, it seems, to fuel its shareprice today.
Excluding Aurelian, Plexmar has signed a memorandum of understanding which would give it the largest claims holdings in Southern Ecuador. The process of due diligence was positive and word is this deal will be formalized this week. A team of geologists visited a small part of its more than 900 square kilometers Escondida property and found primary and secondary gold in all visited areas, including the identification of an intriguing alluvial gold deposit where gold graded a minimum .3 grams per cubic metre. Alluvial gold deposits are interesting because they often relate to ancient tertiary river channels. The accumulation of gold in such channels can be extremely rich, although it is far too early to say much more about Plexmar's example.
Ecuador will continue to add a layer of lustre to Plexmar stock, given the discovery by Aurelian, but the flagship property remains south of the border in Peru. Worth mentioning is Plexmar's acquisition of a high-grade zinc and gold property, just south of Bolsa del Diablo, and in a similar situation to Bolsa, discovered and being worked over at surface by artisan miners.
After three days of tough sledding for Plexmar shareholders, keeping ones eyes on the ball is difficult. Afterall, could the shareprice not drop further? Undoubtedly it could, but then perhaps not. At some point, it does come down to belief, not religious belief, but a speculative belief in the potential of what lies underneath Bolsa del Diablo and in just what it is that pushed all that gold to surface there. After a down day like today, when the stock dropped back for a spell into the high eighty cents, belief becomes tested against the destabilizing forces of concern and doubt.
Philosophers have a beautiful word for doubt: aporia. It is a term fraught with metaphysical meaning. There are no apodictic truths in stocks. Socrates saw aporia in positive terms, as something to be awakened inside of humans. Leaving aside the fact of Plexmar being well up in shareprice since the start of the year, the last few days of difficult trading on Plexmar is an awakening to all shareholders who must continue to ask themselves the question of whether they believe in Bolsa del Diablo's potential or not, or whether they should take profit or loss now. For me, I remain very long. Having visited the Bolsa site firsthand and impressed (stunning so, if accuracy be known) by what I experienced and saw there, I want to see how the Bolsa story unfurls at least until after drilling.
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