PDI indicate they will release their maiden resource within 12 months. Might just be the most closely watched upcoming drill results for an explorer. I know the initial run made headlines that's for sure. A Take over IMO will have a high probability now IF further drill results back up current moderate expectations. But at what price and what investor will have enough stake in the company to ensure a bidding war does not occur??
From my understanding of previous gold bull market runs it goes first the metal, then the big producers e.g. Newmont & Barrick etc once balance sheets show improving margins (kicker here is lower Opex costs due to oil price), then the mid caps and junior producers and then the explorers (PDI). Only new variable this time is that if this is a known cycle in the age of information (I am an example of this) then the speed at which the explorers rise could be in tandem or at least more in lock step with the major producers upon the expectation that they will rise later. This additional early investor / trader entry may surprise all as the expectation that a run has finished earlier than it does only to see a secondary wave result in excessive baffling hype. "It's different this time" . Reference Lithium, Medical Cannabis, Crypto, Tesla, Hertz...
I would like to welcome the 3 million new Robin Hood traders to the gold market and gold ETF's in the coming months.
On a more technical note PDI's volume and price range has been remarkable when considering most SP's consolidate just above or generally well below the CR price. A very bullish sign that significant investor/trader interest is favouring PDI and the upward trend will continue. More prudent money will likely wait for the drill results and not succumb to FOMO so my humble assumption is that larger SP gains are yet to come. Upon healthy drill results I am suggesting that 50.c - 70.c is not an unrealistic target within 12 months.
Highlighted volume in below chart of gold is USD indicates significant volume entering and exiting the gold market in recent months. Gold largely appeared to work as desired in times of uncertainty i.e. it was an effective insurance for ones store of wealth and a bid was there for those that required liquidity.
If I can refer to Dow theory, then as I understand it, the broader gold sector may likely be entering the Public participation phase soon. This would likely bring a proportionate number of new investors and speculators into companies such as PDI due to their rapid resource expansion and there are fewer greenfield discoveries out there. Especially ones with highly attractive strip ratio's.
All the above is just my assumptions on a commodity market in the early stages of a bull market that could be one for the history books. Especially given the rate of currency debasement coupled with high geopolitical uncertainty.
In summary the tailwinds are in PDI's SP favour and if the resource matches the potential.....oh boy.
Enjoy your weekend all and I look forward to the next 12 months with moderately contained pragmatist enthusiasm .
PDI Price at posting:
7.9¢ Sentiment: Hold Disclosure: Held
. Reference Lithium, Medical Cannabis, Crypto, Tesla, Hertz...
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