PEX (ASX) Ann: Pause in Trading

Originally posted by Nijiman: ↑

Hi Happy,

The share price did not tumble from the $0.80 level on the basis of Peel transitioning to being a miner. At that time the prospect of them mining was a long way off. It still is IMO. The sort of transition you speak of generally occurs when exploration has been done with & raising money for the construction of a mill has begun. It is normally during this period of little to no exploration ( therefore no resource expansion upside ) that the share price loses steam & or goes into hibernation.

The $0.80 level was reached back in late January early February of 2018. At that time the Zn price in $U.S was at a high point of approx $3500 / tonne. By December 2018 it was around $2600 / tonne. So the share price was running hard on speculative fervour. & a rising Zn price. Much in the same way now that Fortescue & the other iron ore miners are at the moment due to the rising price of iron ore..

In addition to that we had management pumping the hell out of the Southern Nights deposit at those resource road shows. Which turned out to be less rosy than what they were predicting. It is still a good deposit. But not in the league that were initially spruiking it to be.

So the falling Zn price & the less than expected endowment of Southern Nights / Wagga Tank explains the initial catalyst for the stock price declining. There were then a couple of serious missteps by the company. It was those missteps that galvanised criticism on this forum.

The Mallee Bull PFS is the first that comes to mind. Who can forget that debacle. We had management promising that elusive document ( it has never been publicly released ) for over 18 months. Every quarterly report we were informed that it was imminent. Every quarter we were disappointed. Eventually only to be told that the JV partner CBH / Toho no longer wanted to be a part of the development. So 18 months of waiting for a doc that would outline the economic case for the development of one of the company's flagship deposits. But then given nothing.

There were also some errors made with raising finance to fund exploration. Capital raising's were more often than not done at a low point in the price cycle. Resulting in unnecessary dilution. Drilling results took a lot longer than necessary to be released. Meaning there were extended periods of zero news. Which is something the market hates with an explorer. Controversial decisions to spend $M's buying out very minor royalties held by 3rd parties over some of the company's projects. Using money that could have been better spent on exploration. Those are just some of the reasons that criticism has been forthcoming for R.T.

Yes R.T would be given hero status if he discovered some giant deposit. But he could also go to his grave trying to do so.

As i have said before there are 2 types of geologists. Those that are businessmen & who are good at making money & those who love the thrill of the chase. The have been lots & lots of the later over the years who have achieved little & spent truck loads of money doing so. More often than not it is better to develop a good deposit on hand as you go. Rather than to spend ones life looking for Eldorado.

I can tell you now Happy there is only 1 reason i'm still here as a shareholder. That is due to J. Pitt still being here. If i were depending on the management alone then i would be long gone.

Expand

Hi Nij
You make some very valid points. I'm hopeful that 2021 will mark a turning point for PEX where we finally reach critical mass (we have been making progress over the last 5 years in this regard) and lay out firm plans to develop the hub and spoke strategy.

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Last 15.0¢		Change 0.000(0.00%)		Mkt cap ! $87.16M

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14.5¢	15.0¢	14.5¢	$39.63K	267.6K


Last 15.0¢		Change 0.000 ( 0.00 %)
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Last updated 15.56pm 04/06/2024 ?

Ann: Pause in Trading, page-32

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