*How does someone invest in a mining stock if they know very little about identifying a good prospect or very little about identifying a good project?
Here's a start... find the comments from the MD or CEO in an ASX price sensitive ann which are usually seen immediately below the summary. They're a good start, they have to be presented in more considered language than 'off the cuff remarks' or a 'wink, wink, nudge, nudge' found in random videos and they're provided in a language that can communicate to a novice whether this prospect or project is promising, outstanding, whatever, provided you trust the source... the market will also confirm the comments, a sell off of minor proportions is normal.
*Is it a good time to get in?
Is the commodity in an uptrend or downtrend, is it in short supply, what's the macro? As we've seen with the boom and bust of lithium there's times to be in and times not to be in.
*How do we know if the current market cap (value) is too high?
A peer analysis. This is where the rubber hits the road and you might find out just how little you know in terms of the 'go zone' that the market accepts as a good prospect or project, can your company measure up over time and is the value too high right now (note; AW1's ridiculous market cap of $200mil last year) or seemingly a massive bargain? If it's the latter you might want to find out why as there's usually a reason, and that reason might be a risk that you're more than comfortable to live with.
LTR ticks all the boxes in terms of management trust and ticks all the boxes for investors to be accutely aware of current and changing macro.
Bottom line for me; You have to be able to trust management. I'm neutral towards management here, it's a tough gig and the job of 'the face' of the company is to 'sell their company'. I refer again to LTR, early days it was Tim Goyder who provided the commentary and you could take whatever he said to the bank, then they got Tony Ottaviano and he was more of a marketing person and gilded the lily somewhat. Bottom line is that the company has been savaged by events out of their control but they do have the trust of shareholders and the wider market and that's why they're hanging in there.
My opinion is that AW1 is one of a few true copper ASX listed speccies that the market could re-rate significantly if management are able to convince the market to continue to fund drilling.
AW1 Price at posting:
12.5¢ Sentiment: None Disclosure: Not Held
