After 3 days of forum discussion we are still as far as the beginning. We know almost nothing.
Yes, it is disappointing when the SP falls, and you lose money. On the other hand, we have been whining about all kinds of things for 2 years: Too much cash, too little cash, too high a dividend, too low a dividend. Too short life, too high production costs, too little focus on gold, too much focus on base metals, too little management focus on shareholders, too much of that and too little of anything else.
Okay. Dargues gold does not seem to be the bargain of the century at the moment. What a surprise. POG has been rising for 12 months and the outlook is brilliant. Expanding the reserves seems possible and not too difficult, the whole area seems to be full of high-grade gold and on the top you get a brand new production facility worth A$90. This is not a distressed situation but a well thought out strategic acquisition.
So, let's think positively. As soon as they can they start exploration and find more gold. The reserves can be increased. The production is running. POG continues to rise. Kairos comes into play and Federation Scoping Study shows: Hello, you could make money here. We still have cash in the bank and additional cash flow is generated regularly.
Is the glass half full or half empty? Who knows? Only one thing is clear: if the SP goes much higher, everyone knows better and complains because they didn't buy at 45 cents or didn't sell at 90 cents. Yes, if I had a crystal ball that worked, I wouldn't work anymore, I would buy an island. Sardinia would still be beautiful or maybe another small island in the Mediterranean.
I think AMI is fairly valued. It may be that other stocks are more attractive. Most likely even. So, should I sell? No, because I hold a few other shares.
You should keep an eye on the infection figures in the US. I think a catastrophe is brewing here in 2-4 weeks. Biden will have to react. Whatever. Print more money. Stimulus. Whatever. Something will come. POG remains constructive. Even if gold only goes up “only” to 2200 USD/oz - that's good money for a gold producer.
Vaccination? Yes.... is coming.....but how and when and what effect it will have, we won't know until 6-12 months. A long time, a lot can go wrong. The potential for disappointment is enormous.
So, I sit back and wait and see what brokers and analysts think about this whole AMI debacle. In the end, I look primarily at the POG. If the POG rises, AMI SP can hardly go down all in the long term. The trigger is POG and not to forget a possible massive infrastructure (green deal) project of Biden – this could be interesting cherry on the cake.
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