I don;t make a big thing about it, HC frowns on investment advice, but beyond my acerbic niggling of results, management and the bulls is the reality I'm very clearly saying buyer beware... Yes i have a huge ego (fragile... lol) and enjoy the edginess setting it up to be tested. Nothing dents an ego like being wrong from poor analysis, so i try always to try and get it right with the information available, within the unknown possibilities of exploration, markets and other variables.
The idea that Tajarri results were "no news" and the project remains just as prospective as without this third round of drilling is ridiculous (as the share price reaction by insiders pre-release and the market after proved). I posted good reasons to be concerned about the EM anomalies running down the edge of the ruins Dolerite, of the small size of Orion requiring substantial expansion at depth beyond keeping the same high-grades/thickness. Drilling could have hit thick, high grade massive sulphides in the best targets OR3, 4 & 7 down the east side but all were tested and returned very similar stringer sulphides representative of uneconomic shale hosted sulphides hit by BUX and DRE everywhere they drilled in the King Leopold Orogeny. Same with drill holes over three programs into Grants, Ironclad, Trafalgar, OR1, 2, 5 and the other Projects in Kimberly.
This is the Bresnahan thread, but I summarised the Tarrraji issue because all DRE's projects are well enough understood from a geological and economic perspective to be critically evaluated for their 'risked-potential' and value accretion to DRE's share price. I've always been bearish Mangaroon RE on the basis of very considerable DD on Yangi and HAS going back to last year. I'm not saying Yangi-Yin will never be developed, just I can substantiate a compelling case why the chance of ever getting developed is low, probably binary within a couple of years where HAS either gets carried by the public purse or shrinks into irrelevance. Yangi's last DFS Update showed it is not economic without at minimum doubling the current NdPr price, and even then the risk of insolvency in a competitive market with all sorts of future substitution risk will keep required equity investors very nervous and possibly on the sidelines at anything but verry cheap optionality prices...
Take away Mangaroon Re for a moment, and what is a company with a grab-bag of old dead or dying projects, new greenfield and questionably prospective projects, actually worth in the market? I reckon maybe $20M +/- 10M depending on the market general mood. BUX has a MC of $37M and with a much better set of projects, albeit with IGO earning large percentages free carried to DFS or mining etc. I'm not going to argue this point, look around at junior explorers with no MRE or project looking like a developing mine and they are worth very little. So DRE's share price depends critically on the market's value of Mangaroon RE, specifically Yin which is likely the only deposit of worth they found, and then add a little bit for exploration potential of the the team's other Hail Maries. Given Yangi has an equity value (MC less cash) of zero (some extenuating circumstances), DRE are years off permits and studies, by which time we will know if Yangi gets a ticket to ride or relegated to the close but not good enough pantheon of failed deposits, Managroon RE is maybe only worth $50M MC today... imho.
I'll get howled down for sure, but consider other companies with base metal deposits, often completed, profitable DFS and finance ready, but still just noty good enough to attract risk-equity funding without blowing the share price to smithereens with dilution? Companies like KGL (MC $60M), PEX (MC $60M), NWC (MC $60M) and the list goes on. On one hand, copper is a mature, liquid commodity and safer bet for future pricing and demand offtake, on the other REO although in the gutter has room to rise and get serious government support. Maybe $50M for Mangaroon RE is too generous, maybe to light on, either way it's high risk and risk brings valuation discount.
What about DRE's other projects then? I think Tarraji is severely downgraded after 8 years of exploration. I think Money Intrusion is on last legs with FQM, this IP survey and any follow-up drilling would want to be good but it doesn;t look good. Mangaroon Gold I should make a detailed post of my analysis, but as per a previous mention, it looks very tight and squibby over a modestly small area of good outcrop and much previous prospecting. Bresnahan is an interesting pick-up and some chance as always, but the market pays nothing for very greenfields re-dos based on 'new ideas'. Central Yilgarn like Bresnahan has potential for something, but nothing to date says it's actually got anything of real value. Investors should be cognisant that all these projects may end up with disappointment, and maybe very disappointing by the end of 2024.
Joining the dots, there is a real risk DRE slips back to around 1c and around $50m MC in 12 months of more CR's and disappointing exploration. Other posters have mentioned there is always exploration risk, though too many say things like "in the bag" and some such to quell the fear they have it all badly wrong. I hope they strike it rich with exploration success and M&A, won;t cost me anything either way, but I'll continue my analysiss and commentary of the exploration potential and valuation none the less for those few who aren't wedded to the bull-case and come here looking for some balanced debate...
GLTAH