Whilst the market definitely is volatile, I don't think we will see another March Type Sell off anytime soon.
The market shock earlier this year, particularly, as a result of the lock-downs of states and nations was a massive overreaction. Sectors that were counter cyclical to adverse economic conditions were being sold along with stocks in industries directly impacted. It was stupidity and some were lucky to profit for such acts. Coupled with QE & a low interest rate environment, particularly from the US, all but ensures that alternative assets to cash will remain strong, which is why even the likes of Peter Schiff isn't short the US Stock Markets of Real Estate.
To encounter another 'market shock' it'd have to be something that the market didn't see coming, death of a world leader, something like a world war (which stock markets would be frozen anyways) or sudden increase in interest rates. I don't think news of a Covid Vaccine would trigger a market shock, perhaps, a small market sell off. The markets should have already factored this in and the damage is already done, it'd take at least 2-3 years till multiple versions of the vaccine is developed and delivered to the majority of people.
The decline of all alternative assets to cash will likely coincide with the recovery of the economy, particularly from the recovery of the financial services sector, likely not for a decade by the looks of things. Like our trader mates, money will ride the next momentum wave and money Always moves around. Nothing good last forever and it's all part of the natural peaks and troughs. Good to be long in the sector now, however, keep the finger on the pulse at all times.
With regards to MDI, the fact they they were able to secure a placement at a premium to the current market SP is an indication of how undervalued the SP currently is. Acuity Capital could have easily bought on market for much less. I don't expect a major re-rate until the back end of next year, around the time of the first gold pour and closer to the date when the options are due to expire. News of successful gold pour, strong qtrly production updates or a Merger or Acquisition of some of the surrounding resources will be a catalyst for a re-rate. Targeting a Market Cap of around $200 Mil at a minimum by the end of next year and rising moving forward with rising profits.
With essentially very little debt financing required to recommission the plant, working of a very conservative production output target of 20Koz PA @ $1000/AUD/oz net margin, it's not going to take very long for CASH to exceed the Current Market Cap. The Assets along are already worth more than the MC. The only way i see is up. Historic production output from the plant is summarized below. Current scoping study concurrently being produced to assess plant upgrade to increase production output. Based on interviews with Rick, I think an they'll average of 35 Koz PA over the first 5 years.
I agree, still some undervalued prospects out there, obviously, the value and upside is no longer as good as say back in June.
Over the past 4 weeks there has been some weakness generally across all explorers, many are now in the oversold territory. Ofcourse, historically September/October is generally the weakest month for stocks, they may have had something to do with it, but, the fundamentals for gold are strong and getting stronger, expecting a bounce fairly soon.
Goodluck Brother, happy to provide my opinion on anything you want me to have a look at and remember when investing long to only invest what you are comfortable parking.
(20min delay)