nk I can understand people buying for a trade in the hope it...

nk

I can understand people buying for a trade in the hope it bounces. Even I am thinking about doing this.

But I think DCN is very risky as an investment if one is hoping for a Canadian takeover. Rohan is unlikely to find another Canadian company willing to take them over. Last time Avoca shareholders walked away with a $1billion, while the Canadian company had to ultimately sell the Oz assets for peanuts (yes I know the AUD POG was much lower).

The Allison deposit should provide some higher grade ore, but this will not last that long. It seems the grade from the other underground deposits is too low even at the current gold price. It compares poorly to what SLR was mining at Mt Monger, even the Allison deposit is lower, and SLR pre-DRM merger was at best a higher AISC goldie.

Whatever the operating margin may be to arrive at DCN's operating surplus we need to also take away from that the admin costs, exploration costs, interest payments, capex (Davisite could be right that they are still capitalising some of their expenditure) and find the money to repay the loan. Their net debt increased last quarter so I expect the same for this one.

Finally there are issues with the LOM plan - it needs to be revised to reflect the lower grade, and given what they have at present I doubt there is enough higher grade ore to repay the loan - so they need to get lucky with the drill.

I suppose you have seen Electra's posts here over the last 1-2 months?

Good luck with this play. I hope things do turnaround. It is getting very difficult to find anything in the gold producer arena to invest in with any safety margin.

loki