TVN is so far my most profitable trades this financial year. I brought it at 1.7c and 1.5c, sold 1/3 at 2.5c and 2/3 at 6.5c. Brought it back again at 6c, then sold yesterday at 8.8c. I have to say that it is very tempting to jump back at 5.8c today. However, I decided to stay on the sideline for the following reasons:
1. US debt problem
2. The announcement on 28th said: Having fulfilled the technical due diligence requirements to purchase the Nuurst Project, the focus will now shift to defining a JORC reportable Coal Resource and as such, TVN will not be reporting on a hole by hole basis. I think that a lot of trader picked this up. It means that there won't be any new drilling data come out in the short term. Therefore, there won't be any new catalyst to push the SP up in the short term. If it won't go up, traders will not hold.
3. Both drill holes are too close to existing mine IMO. They do not tell us the full picture of this tenement. I prefer the second drill hole on the north side. I guess that they learned from CEO experience that they don't want risk in the second drill hole. Also, the announcement on 28th said the exploration program will continue with the aim of defining a JORC reportable Coal Resource covering part of the south western portion of the deposit by the end of 2011. It means that the company has no plan to drill any holes on the north side. So, we won't be able to guess the size of the deposit any time soon.
4. The company only has 350K cash left, a CR or a placement is on card and could be very soon.
Therefore, I decide to wait on the sideline for now. However, there is no doubt that I will jump back at an appropriate time.
TVN Price at posting:
5.8¢ Sentiment: None Disclosure: Not Held
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