I was really glad to see this presentation today, some of my biggest criticisms of CXO in the past is that they really underperformed in terms of communication to the market. We had the BP33 approval announcement last week, but we are still expecting the lithium infill results and the gold RAB results as well. These have clearly been delayed (likely due to the Christmas brake - not misspelled), but the CXO of old would have given us nothing but silence, but it was great to see the void filled with an update to the market as to where the company is at - this not only provides an update for us, but also a great due diligence platform for anyone considering an investment in CXO.
I read a post on the forum the other day that stated that SB was being really open and that this was uncommon for directors.....I can tell you that he has not always been this way. I think he used to be quite cagey about the prospects of the company, but since we have been noticed by the market and from the time we found some good initial gold numbers, it is like the company has come to life. This says to me that they are starting to believe, which is an excellent sign (they probably always did but didn't want to show it without cause to do so), this belief is hardly based on thin air, and is perhaps an inkling suggestive (perhaps) of what they might have found. There is a marked difference in how the company is portraying itself now, and I think it is a sign of what we can expect from the announcements that are to come.
Our SP is definitely in a consolidation phase at the moment, but it was good to see a little bit of life this afternoon as most stocks retreated. I watched the VUL share price go to $14.20 this morning only to retreat significantly this afternoon. I feel for those that bought in at the top, I only hope that they get to be in the positive as the year goes on, but the valuation of that company was already crazy for one that is still a long way from actually earning any money. For CXO, the announcements that we have coming will likely give us the next leg up, and then we will have the resource upgrade, then the DFS, and finance could be anytime. Then we have FID - all of this in the next 3-4 months. This is finally the time for CXO to shine. Speaking of resource upgrades, I liked slide 15 of the presentation that has a couple of question marks over potential future resources. Could this be somewhat suggestive of what to expect? the next upgrade moving us to somewhere between 17-20MT, and the next somewhere closer to 30mt? They are either selling us a story or they know we will uncover more resources, or perhaps they are going to acquire them.
I noted the suggestion of additional acquisitions to contribute to future resource growth. Clearly CXO is now starting to consider buying additional tenements which could add to our resource base. I think this is a sign that we are no longer a penny dreadful and that we are starting to become a real player in the market. I know our cash position doesn't necessarily support a predatory attitude, but our SP and potential finance could - the fact that they are mentioning it at all shows confidence in being able to get the cash to pursue - these are all great signs (LRC maybe?). I really liked slide 14 that had a colour scale arrow against the suggestion of future acquisitions which shows that the colour gets darker as the arrow moves towards mineral resources and ore reserves. This suggests to be that the board is aware of some potentially more developed resources that they can acquire (perhaps they are in talks already and this could also support the increase in production that they are targeting)....Our resource is set to grow in the next month or so but it may not grow quick enough to support an uptick (30% from SB's last interview) in yearly production whilst concurrently extending mine life so I think that management might have a plan to make this possible - remember a trade mark of a poor economy is M&A.
I agree with many posters on the forum lately that have said that if you are thinking about selling at the moment, then you are taking one hell of a risk. Some aspects of the market have seen some amazing growth over the past few weeks, the question for me is how long will it last? At some point the fundamentals of a project have to kick in. CXO is positioned for the SP not to recede because the fundamentals do not support it, as opposed to many of the movers lately that are moving on hype alone. Many a people got burnt back in 2018 when they jumped in based on FOMO, hopefully there is not a 2.0 generation being caught at the moment as well. Please do not misread me, lithium has an amazingly bright future, but everything comes back to fundamentals in the end. Not only will CXO not retrace too far, but we have such an amazing portfolio at the right level of development that will provide for sustained (and justified) SP increases over the next few months. I have said it before, but our lithium resource alone is likely at fair value at about 30-35c, then add gold, silver and copper (and uranium) and 50+ is not out of the question. Add some FOMO and hype to it as well and we may end up further north again. I am hopeful that the Board is playing hard to get at the moment with potential suitors, as has been stated (and in the presentation today as well at the bottom of slide 10) - we have no shortage of them.
We are in for a really exciting time but my suggestion (not advice) is to try and not look at the stagnating SP as a bad thing, but to the contrary, a firm base is an excellent foundation for any further movement. We are just in a holding pattern waiting for what is to come....in the next week or so! We know gold is to be announced in the next few weeks (from the presentation today), which means that the lithium results should be out either in the next few days or next week.
GLTA
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