Typically I have only really invested in the more spec end of gold explorers, thinking the big gains were worth the big risk. I bought into DCN after reading a really good article (which I cant find again...grr) that showed analysis from the last ten years on explorers transitioning to production. The long and short was that while those that made it to production from early exploration certainly made the Disallowed club, the odds were around 5%. Alternatively, those companies that had finance and approval to go to production and were just going through the steps of building etc , still made a handsome 2-4 bagger, and with a 90%+ chance of success. Soooo
10 x my $$$ at 5% or
2-4 x my $$$ at 90%
Love a punt, but this really hit me. Not that I wont still be shooting for the odd Disallowed, but maybe the portfolio could do with some firmer bets too.
DYOR
DCN Price at posting:
$2.08 Sentiment: Buy Disclosure: Held
