Copper & Nickel, page-228

Evening, Wilson. There are several ways to view SPQ. While the article I posted might be an exaggeration with regard to future copper price, it may not. But there is certainly lack of copper supply to meet demand for future consumption with both EV growth and population growth. Its also been in the interest of armament manufacturers and national interests to keep the copper price down together with gold for obvious reasons.

The current market price of SPQ is 3.2 cents, yet if you take a line through Morningstar, they have a current fundamental value of 9 cents. Sometime back, I had a back of the envelope calculation at 10 cents based on what they had already discovered before drilling commenced at Cockie Creek. The major drivers behind my thinking were based on what has been discovered at Bottletree, Steam Engine and Eastern Ridge et al in the form of copper, molybdenum and gold despite not finding the core of the porphyry deposit at this point in time. That drilling was always an intermediate view while negotiations were in play for Cockie Creek and Wyandot and nickel imo. I also stated at that time, it was premature to value things higher and thought shenanigan's will ensue as they always do in the market with vested interests and opportunists; and that people should consider taking profits to reduce average cost of a core holding if they have a long strategy. This has played out.

Add to the back of the envelope discoveries, then SPQ can use the intrinsic value as collateral with other tenements holding zinc, silver, lead, uranium, nickel and cobalt. The valuations assist in estimating risk v reward can for a long play. Certainly in my case its already over 3:1. That is a ratio the bigger players tend to use in speculative scenarios, But i expect more to come, based on the geology and RIO pegging around SPQ.

Its important to understand when to rely on TA and when not to. There are many tools to use and there are many tools working in their own interest that manipulate sentiment.

Perhaps the current price has been a shakeout by vested interests and aligned networks. Current market price does not represent the fundamental value of SPQ imo. I note SPQ is no longer shorted. I note the shorting pressure is coming off LTR and MGV and for that matter CXO who are holding complimentary minerals for the EV revolution. Hopefully more to come for holders. Their future value depends on who has control of the shares. This is why it is in the interest of some to accumulate at an undervalued price and piggyback on the market makers. No one can deny the rebound had made money for those with a little strategic insight and courage (unless they were in a network know) because price could not be sustained too far below a fundamental value. Turnover is the name of the game for some. Trading these days is very much based on strategy and new technologies to take advantage. Unfortunately, more CR's tend to correlate with control weakness in speculative stocks, unless shares fall into strong, hands with a position view. Its important to keep an eye on the register.

So the way I read your hypothetical then, Wilson, if mineral price was to increased 10 fold for the commodity then it could be argued at current market price SPQ based on a back of the envelope perspective and assuming no future control strategies were in play (all things being equal) by prospective take-over candidates, then SPQ could sell for 32 cents. If the FA valuation could play out without market encumbrances based on fair value, then a future value could reach 90 cents in the hypothetical scenario based on the value of the commodities in the ground currently plus the value of other tenements. However that is unlikely, IMO unless there is further discovery at Cockie Creek which has people's focus a the moment. Then there is the nickel to come.

At present, the bargaining position of copper producers can be viewed in terms of 23% price slump and having to go cap in hand to financiers. It is retail who ultimately cause a spike, but disposable income at present is tight. I used to own OZ minerals where games were played and the banks lost a class action. Rare, but it was over copper. The world will never be snow white. The big guys see the future way out, and not in the myopic terms of traders and position accordingly. Then the question becomes how long can a small outfit keep the lights on while the rise in price due to scarcity drives a huge fundamental value increase? When will the world gain some normality? If it becomes a waiting game, then Steam Engine, farm ins, tenement sale are further options in SPQ's case and this may not be the case for other firms you mention, Wilson. Small firms are actually more flexible than larger organizations.

I feel SPQ made the correct strategic move to prove up Cockie Creek with a small CR in terms of cost/benefit analysis. Bornite and chalcopyrite have high grade copper yields which may appeal to people who do not understand the value of quantity in a porphyry deposit which geologists think underpins the high grade stuff too. Hot results will be game changers in terms of calculating the back of the envelope value of the mineral in the ground. So in the context of a hypothetical hot result with a 10 fold increase in price based on what is in the ground at Cockie Creek at this stage then multiples will be in play. I would think well in excess of 90 cents based on future price rise. You would have to translate that to net present value. Its a guess at this stage.

Selling? I think not.

When the modern TA is being played, I like to look at the old fashioned Point and Figure Chart which takes out a lot of noise. Its interesting to consider where the bottom lies. I also see that big "M" pattern in the chart. Of course the money flow has not hit to ensure take-off, but that is dependent on the Cockie Creek results. Its wait and see. The "M" pattern, similar to Gartley "M" tends to be followed by strong demand.




GLTAH