Ha tell me was your "coming to Jesus moment" when you sold your...

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marykegeorge

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17/09/23

22:56

Post #: 69893151
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Originally posted by Arh0070: ↑

Well Finally DEG management has had “its coming to Jesus moment”.
I have been talking about for some time about how unrealistic the preliminary feasibility study was in terms of costs to build the plant and timelines.
Now in a release on a Friday (slow trading day reserved for releasing bad news)in the annual report they have admitted that when the full feasibility report is released(which is being delayed)costs to build the plant are going to rise due to inflation and timelines for completion of the plant are slipping.
It will be interesting to see what the numbers are .I expect the cost to build and finance the plant will be up by at least 30%.This is because of inflation ,rising interest rates and supply chain difficulties combined with the extreme weakness in the Australian dollar.
Second in the original plan they had permitting and construction in the same time frame.Clearly this was not possible ,its impossible to obtaining financing without permits nor to start construction.Permitting is getting ever more difficult worldwide ,I am not an expert on Australian federal politics but I would suspect that the Labor government is more interested in the environmental consequences of a big mine and its impact on “global warming than the previous government .I would suspect this will delay permitting.
Despite “expressions of interest “ for financing it will become more difficult especially given rising interest rates and economic uncertainty.
I use sentiment on bulletin boards as a contrarian indicator ,clearly the vast majority of posters on this board are bullish about DEG ,it is apparent many are novice investors (this is also an extreme contrarian signal).When all the bad news comes out then the time to buy is when everyone turns negative or there are only a few posts .
As I have said before they could partially finance the mine with selling royalties ,only FNV and Wheaton are big enough to take it on .
The company is being risked by building a big mine which is extremely difficult to achieve in this environment with zero cash flow ,it would have been much more sensible to build a small upscalable mine ,establish cash flow and expand production as time goes on .Hubris of management has prevented this option being considered.
As an aside I noticed that the price of Lithium has dropped by 65% in the last year .Good luck spending money on lithium exploration to try and keep the share price up.
The volume of traded DEG shares is very low compared to the number of shares out there ,I dont know how this has been accomplished or how the Share price has been maintained within a trading range during this huge bear market in gold stocks and explorers in particular.
Many explorer stocks are incredibly cheap right now ,hence there will be no takeover as there are reserves all over the place that are incredibly cheap right now in contrast to degs reserves, the big gold miners profits are down right now and almost all are focusing expansion on in house organic projects ,only explorers with cheap resources are being taken over.

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Ha tell me was your "coming to Jesus moment" when you sold your shares in DEG for 17 cents

DEG Price at posting: $1.37 Sentiment: Hold Disclosure: Held
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