resistance, page-62

Several things.

First: the resource isn't yet formally proven. That happens with the JORC, and they need to know not only the composition of the ore body (which is what the results to date have given us), but also the cost of separating the mineral (the useful stuff) from the gangue (the stuff that has no economic value/use). You also need to know roughly what the mine is going to cost to build (bearing in mind the need to avoid contaminating ground water; keeping excess water out of the mine area; reinforcing the mine walls as necessary to stop them collapsing; etc.)

Second: assuming that the mine is built, and the extraction of the minerals is economically viable - how much will it cost to ship it from the mine to wherever it's refined into its first form? How much will it cost to ship it from there to the second stage processing? What's the political risk (ie: the risk that the country decides to go back on its word and - for example - nationalise the mine, causing the company to lose its investment)?

Third: just because the body of ore itself is worth billions of dollars doesn't mean that the company should be worth billions of dollars. If company X sells twenty billion dollars' worth of goods in one year, but then has nothing the next year because the body is tapped out - what's the company worth now? Answer: depends on what else is in the pipeline. On the other hand, having a mine setup to produce a billion dollars' worth of goods a year, for the next twenty years, provides a degree of certainty, which in turn gives a more stable platform for long-term investment in future growth. There's also the question of how much of the money that's brought in by the ore body will need to be spent on salaries, further production, and so forth.

Right now, there's a lot of work to do to get Ngualla to the point where it's ready to mine. The share price reflects that (as well as a lot of the uncertainty and risk in world markets at the moment.) As the future gets more certain, the share price should rise accordingly, all going well.

As for shimmer's comments on shorting: the simple fact of the matter is that shorting is here, and it's not going to go away. Remember that shorters are carrying a lot of risk: somebody who's bought into a share (assuming fully paid ordinary shares - see also the BrisConnections debacle) stands to lose only what they've paid. Somebody who's sold a share short is - theoretically - in a position to lose an infinite amount of money, if the share in question should happen to skyrocket without warning. Sooner or later they have no alternative but to cover their positions.