Hey mate,
It's hard sometimes to know why stocks get sold down, particularly when they are kicking goals and making progress.
People sell for a number of reasons.
I remember i held LNG a few years back @ 50c odd...... one of their major shareholders dumped alot of stock at around 80c and the herd of sheep followed.....it went back to 50c, but there was no news from the company which could explain it... I did my DD, and saw no reason to sell (I actually bought a little more).
The stock ended up clearing $1 a few weeks later and ultimately went to over $4 (and yes i sold).
There are things to consider with MCT currently :
- Kagara liquidators (from whom we bought AB and now own the deposit 100%) have been selling down from their 20 odd million shares they were given as part of the AB transaction. We knew this would happen.
- We are coming out of the wet season. Areas in WA / Northern WA allegedly had very heavy rain patches over Jan/Feb/Mar. Many people take their money out of miners during the wet season and then buy back in once exploration fires up again.
Answers to your question IMO :
1. Yes AB is deep, but there are resources being mined that are deeper. It comes down to ROI.
Of course, this also means higher costs to get things started. AB, however, has the largest undeveloped zinc/lead MRE in the country ( with a decent chunk of silver too)... The SS came back very positive and the PFS currently underway is also going to test the untested area of strike (130km odd), of which could increase the figures again. We also have CNFC onboard via a MOU (a multi-billion dollar state owned enterprise)... obviously management are working towards a binding agreement (which IMO should see a substantial re-rate).
The fundamentals of zinc are looking great for investors.
2. Yes it appears that way.... None of our major holders/strategic partners appear to be selling (including SM who are in @ 7c).
3/4. Work at Lynas Find, 2nd stage drilling @ Stannum and work @ Kyarra (Cobalt) would be my guess as to what work is about to kick off (field work has probably been completed or underway).
Management were at a roadshow in China last month, and as I mentioned, the wet season is coming to an end. This managment team don't tend to wait around, so I wouldnt be surprised if we get an announcement this week with an update on these programs.
5. Of course
. There is always alot of competition........
Unfortunately, many management teams, when it comes to juniors, simply do what they need to do in order to pay their salaries (dangle a carrot, raise, dilute and repeat year after year).
IMO, MCT has really set itself apart from the others (and yes, of course there are other good juniors out there)
- The stock is agreed by many, when weighing up risk vs reward, to be very undervalued (including by IIR who valued the stock around 19-25c late last year).
- Management are incredibly competent and results driven. Matt and the team have consistently added value to the company via strategic partnerships (with big players like CNFC, SM and FMG) and the acquisition of key tenements (liaising with some very well respected experts in these respective fields).
I honestly can't fault management on anything since I've held the stock @ 1c equiv as PLD (and I am quite vocal when it comes to poor management/decisions on the stocks I hold).
Last year, the time it took for third parties to grant us our lithium tenements was disappointing, but this had nothing to do with management (rather, the DMP). They hit the ground running once granted.
Another thing to consider :The company mentioned previously that they were considering looking at a newly listed vehicle to spin off their lithium assets. This, IMO, shows confidence in AB as a standalone project in the portfolio. These sorts of spin-offs, if done well, can work out very well for shareholders.
As always, DYOR and definately contact the company if you have any questions. I have contacted Matt on many occasions and haven't got a bad word to say about him.
As a disclaimer, this stock is my largest holding and im still accumulating where I can.... You don't find too many juniors with these sorts of resources/tenements, with management this competent and driven, at an undervalued MC/SP, with such enormous potential upside.
All IMO.
Cheyne
