"It's an ill wind that blows no good." If the market always priced news perfectly in the short term, then a lot of opportunities would never arise, or would quickly disappear. If an underlying story has enough perceived value compared to the MC then sell-offs can create buying opportunities. FWIW, I bought more this morning in the low 70's based on the following approach. I'll get a better idea in a few months as to whether I should have.
Investor approach: seek value first and hope price followsSince I see myself as an investor (rather than a trader), release of news leads me to consider -:
- the primary question: how good (or bad) is an announcement and what, if anything, does it do IMO to the underlying value of a company -v- its current MC;
- secondarily: how might news affect the share price in the time frame within which I might want to buy or sell. (If the share price bounces around while I am not in transacting mode then I'll look on at price fluctuations as interesting but irrelevant at that time).
Investing seems easier than trading…It's hard enough assessing underlying value on limited information (the primary question) without also having also to assess what's likely factored in at a given moment...So many unknown people with different drivers who could be influential in the short term ... rationally or otherwise depending on their circumstances. Difficult stuff to build a long term investment strategy off …
The approach I like is broadly consistent with Warren Buffett's points about:
- investing as if the market will be closed for a while (not really practical for exploration stocks that need ongoing cash and payout no dividends - unless you have very deep pockets as an investor. But it does help to focus on the value of patience. "Money moves from impatient hands to patient hands" etc. ); and
- personality (not just analytical skills) being so critical to success, due to the considerable emotional wrench of volatile share prices and news events of a temporary nature and which may cause panic selling or over-enthusiastic FOMO buying.
New discovery at GreenToday's announcement looked to me like a good build to ENR's underlying value:
- It's a new discovery, in reconnaissance AC drilling, which takes the Green project forward very significantly.
- It seems to be the same style of mineralisation that WA1 was getting early on in its now recognised world-class Luni project, and also seems to be part of the same mineral system.
- I'm not implying comparisons with the (current) resource(s) at Luni – it's way too early and there would be no basis for doing so. I do however see important elements in common, which is unsurprisingly given Green's proximity to Luni and what we know so far re the setting and the patterns in the structures at Luni and Green.
- In assessing today's Green discovery announcement I also take into account the setting at ENR's nearby and exciting Emily high grade discovery, which also is within spitting distance of Luni. This is an richly endowed area within which to be drilling up a new discovery that already shows high grade niobium enrichment.
I'm prepared for now to wait and see:
- what comes up at depth for the EOH holes, being 4 of the 6 that were reported on;
- what the currently unassayed remaining holes produce;
- how the eastern holes go and other future holes that will be drilled when the AC rig returns as foreshadowed.
- what may come up via RC (or diamond) drilling on other than the EOH holes
- etc. For example, none of the above excludes IOCG potential either. I recall an earlier WA1 report of significant Cu in soil anomalism in the most eastern part of their block, right up near our fence Line 4.
Exploration - an iterative processI'm not surprised that exploration on Green will be an iterative process. As I recall the first 3 holes in Luni didn't reveal the huge company-making discovery that was Luni until November 2022. That was 3 months after the initial and preliminary drilling observations were released (in August 2022). If holders had bailed out after the August 2022 announcement – despite the efforts of the company to explain why the holes looked so interesting - they would have missed the benefit of WA1's further work - and assays - that only later revealed Luni as an world-class niobium+ discovery.
I'm happy to hold and see what further Green offers, as well as other targets in similar settings like:
* Emily - with an RC rig,
* initial drilling at Joyce, McIlroy and Hurley (all in cracker settings it seems to me).
And there are so many more targets that currently seem worthy of drilling.
And existing discoveries like Crean-Hoschke that could offer much more ….
Very good acreage in the hands of very good people, hell-bent on discovering viable deposits of high value minerals, supported by strong existing tailwinds from what they already have within, and of course aided by the strong spotlight on next door. And all this in a very strong sector that won't go out of fashion in a hurry, being executed in a Tier 1 jurisdiction. There's a lot to like...
(20min delay)