Ann: Drilling at Zaraa supports shallow high-grade potential, page-18

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22/08/18

11:17

Post #: 35089088
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Originally posted by JID ↑

Morning Guys,

XAM is in a tough space and the SP is reflecting that.

Their project to-date hasn't thrown up spectacular results (e.g. Nevsun) and whilst it is OK, in this market its a big "meh". On top of this the location is less than attractive in Mongolia (e.g. look at the issues RIO is having/ had with the Government). The Cu sector has now entered a bear market and no one wants to touch the space outside of some potential near-term M&A targets.

XAM have c. 3 Quarters of cash in the kitty at the current burn rate and today's announcement seems to be an effort to arrest the SP decline.

Whilst Cu is in a bear market and XAM is well off the M&A radar, I simply cannot see a reason to hold it at present.

What is a near term catalyst for XAM specifically ??? Can't see one personally.

In terms of developers, I would suggest that SOLG (held via DGR) is a much better candidate due to the near term scheduled release of an upgraded M&A, Newcrest's cornerstone shareholding and potential for a lobbed takeover offer.

Cheers
John

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John is there any reason to not hold SOLG directly? It is looking rather cheap at the moment (the market really seems to think we are in for a long bear copper market, but the actual physical seems to be saying something else).

DRG is unloved by the market over a long period of time and trades at a significant discount to its underlying holdings. Is there any reason to think this will change?

XAM Price at posting: 12.0¢ Sentiment: Buy Disclosure: Not Held
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Ann: Drilling at Zaraa supports shallow high-grade potential, page-18

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