MGT share price, page-8826

There have been several posts commenting that the PFS wasn’t a great result, that the market has spoken and that MGT is a dog stock, which is all evident as a result of the recent share price fall.In response to this, I’d like to contribute my thoughts.

Firstly, the PFS has been presented with a positive result which has led to work being commenced on the DFS. If the results didn’t look to be feasible, management would not be progressing any further. Perhaps it was too conservative, but this provides a buffer if things go bad, or the opportunity to outperform and produce excellent bottom line results. Furthermore, many companies can take years to turn a profit and some never even get to that point. If MGT can produce a $160 million profit from year 1, that is a great result. Everyone is entitled to share their opinions, but if you’re of the belief that the PFS is a load of crap, please share your credentials and Iron ore experience so that you have some weight behind your arguments, and we can learn from your wisdom. Otherwise, you lack credibility and any ‘advice’ should fall on deaf ears.

Secondly, people say “the market has spoken” and that MGT is overvalued etc. Let’s consider this. Who is the market? If you go back 15 years, the market was made up of Institutions, sophisticated investors, mums and dads and a few speculators and gamblers. If you had no knowledge of the sharemarket, you would most likely not have been trading/investing. Fast forward to today, and you have Gen Z with many first time investors entering the market, threads on Facebook, Reddit, Twitter, and Finfluencers on YouTube, TikTok, Instagram etc. People that aren’t qualified to give advice, are now convincing people how easy it is to make money on the sharemarket. There are many novice investors or others with some experience, taking/giving advise about ‘hot tips’ or looking to make some quick, easy money. While some may get lucky with their picks, most people end up losing money. Investors should be investing with a 5-10 year minimum horizon. With this in mind, and the fact that MGT is largely held by retail investors, many people were holding, waiting for the PFS to drop with the expectation of the share price rocketing upwards. Once the PFS dropped, the share price did start to initially climb, but then people started to quickly take profits and sell out. As the price started to fall, more people continued to sell, most likely, locking in their profits. However as the selling continued, either stop losses were hit, or people decided to sell out before losing any money, or taking a small loss. This selling put pressure on the share price which continued to fall. Now whether you’re a first time investor, or someone with years of experience, to see your profit or initial capital disappear day after day is no easy to task to watch. This leaves you with 3 options. Do nothing, buy more, or sell. Generally speaking, most people, especially novice investors, would typically follow the market and sell as it is hard watching your money being taken away from you. And if you give up and succumb the the selling pressure and join in, this will continue to push the share price lower. I believe this is the reason that MGT has fallen from recent highs. But as Warren Buffet says, be greedy when others are fearful.

MGT is a long term stock to hold. It will take 3 more years to get to production, and then the fun begins. Their initial mine will have a 20+ year life, and they have much more in the ground to explore and dig up.

In summary. Shares go up and down. The recent fall over the past month will show up as a little blip on the long term graph. The fundamentals are strong, and the management team have outlined a sensible approach to production with the knowledge and experience to get there. Patience is the key. As the DFS draws closer and more announcements are revealed along the way, the share price should start to climb again. The company has enough cash to get through the DFS, so let’s sit back and let management get the job done. Also the way I see it, people are not selling their shares, they are giving them away at a discount to buyers who want in. For those that understand the fundamentals and the PFS, they see value and are keen to buy. If MGT really was a dog stock, there would not be hundreds of buyers lining up every day buying up shares.