Galena Mining Limited (G1A) - All systems go at Abra
G1A has announced the satisfaction of conditions to draw down its Taurus Debt Facilities. The material cash inflow next month will allow for the acceleration of construction activities at its Abra Lead-Silver Project, which is now fully funded and 17% complete. We believe funding uncertainty has been a driver of G1A underperforming base metal peers over the last six months and expect G1A to re-rate. Abra is a high quality base metals project in a Tier- 1 jurisdiction and offers attractive 40% EBITDA margins at spot. Trading at 0.5x P/NPV the stock has material valuation upside. BUY maintained, with a TP of A$0.46/sh (prev. A$0.48).
As the above latest update shows, G1A should now be considered a "safe investment" with potential for some SP appreciation albeit over the next 2yr or so .... with all the usual assumptions.
Returns should always be calculated on years held .... 100% gain over 5 years = 20% capital gain which will be taxed at your marginal rate.
Compare this with a boring band like CBA which has increased its SP by 80% from its 2020 nadir, and pays a fully franked dividend.
When your in this stock you not in alternatives (Dah! I hear your say). Buy low, sell high is often mouthed but often not practised.
My biggest trading fault is "falling in love with certain stocks". Have a brief affair with stocks, don't marry them.
G1A is about to embark on a promotion tour backed by their supporting brokers. Now that G1A is derisked, more institutions should join the register.
So, post tax loss selling the 3rd quarter may see a jump back into the 30c range, but unless M&A merges ( it can only be TOHO ?? ) blue sky wont happen for several years IMHO. Patience is a virtue ..... in others.
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