G’day all.
I’ve been thinking on this for a while. I’ve read all the posts over the months with reasons and theories why our SP is where it is.
with FEX, everything is exposed. The market knows we’ve hit or exceeded forecasts and costs are ok within that. They know we have cash in the bank and will keep accumulating cash as we go. The SP has basically tracked the IO price, as someone kindly pointed out.
so right now, this is what the market thinks we’re worth; 33cps or $174m mkt cap. That’s it.
We’ll continue to oscillate with IO price. But I’m wondering if the market will ever give us the rating we THINK we we deserve?
the amount of cash, clearly doesn’t impress the market, like it does with other miners. That’s the long term forecasts for IO price talking. They don’t think it’s sustainable.
I've always been hoping they will drill the the s##t out of not only the current tenement, but also our much larger JV next door. As we saw with TI1, these high grade deposits generally have more around them. Increase in both LOM and output, should be seen favourably. But who knows with these junior IO’s.
Then we know they’ve said they are looking for acquisitions. Probably both other IO areas and/or other resources.
maybe all of that, when announced, will push SP higher, but from what I hear about other juniors, I’m now not so sure.
There’s no question in my mind that much of the perceived “undervaluation” stems from the market’s long term view of the IO price. History is on their side. They won’t change their metrics. If IO stays up for this year & hopefully next, we might see a very gradual rise in their IO forecast prices. We won’t know that, until it happens.
looking at the historical charts of some of the bigger guys, we have indications of when the market gives them an uptick in value. We’ve seen some of that with the juniors, particularly the decent jump when a successful feasibility is announced. Getting into production and shipping is met with a yawn, as we saw with FEX. We got a decent jump well after the first quarterly, but was that due to the content of that report, or the fact that IO was raging higher at that time. I suspect the latter.
now all this is just me with too much time on my hands, so I can over think things sometimes. But I think this is a reasonable theory. Time will tell either way.
it won’t change my position short term. It may well influence just how long I hold these IO juniors. Clearly we’ll rise and fall on the IO movements. Just not sure of what if anything else is going to get us to what we believe fair value to be.
cheers,
ned.
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