FM3 (ASX) Ann: General Security Agreement

Originally posted by Corgi: ↑

@mach8 @karmalocust @Hateful8 @Bellavena85 @123david321 @GuardianAngel8 @mercsman @ASXO @nzmicro @BrettVadar @bobasteve

Sensibles,

Wanted to provide a critical review without the bias.

As previously highlighted, there are soooo many factors at play which influence the SP in the shortterm, which is why it's important to go long (at least long enough to not get suckered into selling at the lows of a secular bull market).

It's not easy to watch the entire sector in a downtrend and to see the SP fall from recent highs. But, to expect us to magically see a retracement back to recent highs right now is unrealistic.

I've done a quick comparison of some of our 2020 exploration peers and the analysis is as follows

Facts are
We are all massively down from recent 52 weeks highs
Those that have run a little harder and down a little harder
Trading volume/$liquidity also has some influence
We are not trending down because we did anything wrong or that our results are bad, it's the complete opposite, we are way over delivering
Additionally, this is not the first time we pulled back more than 50%. It wasn't that long ago that we had a pull back from 9.7c to 4.3c and that was off the back off a string of really good anns aswell

The down trend and selling is likely funds which own our shares within their portfolio and at the moment, their portfolios aren't looking very good and there would be constant adjustments made. In my field of work a majority of my networks are from institutions and funds that invest in various sectors so I'm aware of how things work and the volatility involved.

There is no need to speculate on who is selling. If you are really really worried, just exercise your right pursuant to the corporations act and request to view the entire share register.

As mentioned in the other thread, if you guys managed to read it, until the managed funds return to the sector, we are not going to see big moves in the sector. It's their money that is going to move the market. As long as we keep executing and delivering, we will have a greater perceived value and this will be strengthened once we have a MRE which analyst can then start throwing solid valuation numbers based on a defined resource. Based on all the macro economic factors, there is no reason to see why they would not return to the sector. Money from managed funds ALWAYS moves around, it needs to. Just view them as glorified traders.

When will they return? I don't know, it usually and historically starts in the gold futures market followed by investment in Gold Producers (the actual beneficiaries from higher Gold Prices) and then the explorers. Last week we saw a net long increase on the positions from the managed funds in the futures market. I suspect, based on the recent POG increase, that they have further increased their net long positions. Or the bullion banks have closed out some of their net shorts.

What is the bottom? No one knows and no chartist is going to be able to predict such. You'll only know a bottom in hindsight. But if you believe something is undervalued and the market has stuffed up, invest what you can afford to park for the longer term so you are not over leveraged.

My views and position on future of investing in the gold sector? My strategy for investing in the sector is to invest is good advanced explorers, preferably with a defined resource + resource expansion potential and that they'd be in a position either complete their DFS/BFS early 2022 and commencement of construction by the end of 2022. I specifically chose these companies because I wanted the upside of investing in resource increases, progression from developer to miner and the exuberance of their first few years earnings on high margins all at very low marketcaps. Even with the downtrend, it doesn't really phase me, because the biggest risk is not the SP, but the companies not being able to raise the capital or obtain finance to progress the development. Once that happens, it's game over. Fortunately, that hasn't been the case and all are well funded heading into 2021.

There are some bargains out there if you trust your valuation of the companies and believe the Gold Sector is still alive. I like to stick to the 3:1 upside potential over a 12-18 month period.

Let's put it this way, in 2021, if either DEG, NVA or TSO are not doing well, than the entire exploration sector is likely to crumble, possibly globally, hundreds of explorers and deposits will become stranded, which is basically Armageddon for the sector... I highly doubt this is going to happen.

In the mean time, just kick back, enjoy and analyze the next lot of results. The Ternera target is expanding with each announcement and the story is building to see if there will be continuation to Toro Gordo, Drone Hill & the East Target!

Don't worry, when the time is right, perhaps we might even help the company out a little and present a business case for a Take Over to Lundin Mining or Kinross! Sure they'll value our prospect fairly!!

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Exceptional analysis!
Similar pull back as the last one from 9.7 to 4.2 as you said but this time its different because:
- Unlike the last time, I'm pretty chill now. Even when I failed to pick the bottom and bought a lot more at 27c 28c. I also bought all the way down from 38c but only small parcels at a time. The main reason why is because most of us here who managed to get in early are still sitting on a hefty profit right now. Regardless of the recent averaging up. But I do feel for those who got in late at the recent high or those who sold for small profit and then bought back. Some must be deeply in the red now.
- The last time because TSO was quite new so people had little understanding of the what they invested in and what it might become. This time we did catch more attention from the market (just by looking at trading volume or the number of viewers on TSO forum). People must have done their homework and understand TSO's potentials better. Also the market cap is bigger so the SP is harder to be manipulated. So for people to overkill the SP like this is a bit concerning. Hopefully its purely due to market's sentiment of the whole sector like what you said.
- Those announcements that we released during this recent down trend is 10 times better than those we released during the previous one. They all unlocked way bigger potentials. For example "exceptional Toro Gordo surface sampling assay", finding a "Ternera repeat" and "new southern high grade zone" etc. All of these announcements are much better than a 100g/m hole.
- I have applied @Hateful8 strategy which is making TSO a monopoly in my portfolio. I have sold 5 or 6 other stocks to buy more TSO. Now I only hold MDI, TSO and PMY.