Hawkish I am not critical of your decision to sell your holding however I suggest that you will live to regret it. I have held CRK since 2006 and my portfolio is exclusively in gold stocks so feel I have some experience and perspective.
If you overlay the ASX and gold stock charts over the last 2 yrs they roughly correspond. Most of my gold stocks had a similar graph to CRK ie large drop, bouncing along the bottom then climbing out before trending sideways mostly following the general index. CRK conformed until JP Morgan began selling. If not for this I would guess that the SP would now be range bound between $1.10 and $1.40. The resource tax has not helped either.
JPM has its own reasons for selling and we have seen a note form one blogger noting a report re change in priority from gold stocks to base metal. I also privately suspect a disagreement between Frank and JPM over direction/policy and when JPM had to make decisions on what to sell CRK's forward profile did not meet theirs. I am also aware of JPM exiting other gold co's which have and still are reporting exciting results and frustrating share holders with their constant selling. I suspect that JPM will only adjust down - not sell out. One also has to consider how these large investment banks make decisions. Meetings will be held, decisions made and many links down the chain some one will implement them- end of story. I suspect that a feedback loop back to the decision makers is almost non existent. We all know and have to take responsibility for the upside and down side of large fund holdings on small MC co's with regard to liquidity. This is a reminder of that. Some see damage - I see opportunity. What we have now is cheap shares for the wise, greater exposure/profile of the co and greater liquidity from many new small share holders. The SP could be back over $1 any time.
My confidence comes from the protection we all have when investing in a public co. There are rules and accountability with consequences. If the co has price sensitive information that it has not released and or JPM or any other investor has inside information and acts on it the same applies. We have an experienced new chairman with an industry wide reputation and a new board member who has visited the site, has an independent valuation, been in constant contact with Frank, is still buying and has made a personal fortune from making good investment decisions. He and his fund hold approx 15% of CRK.
Regarding the co reporting I don't think that there is much more they could have said. The ASX is not a forum for comfortable chats to assure nervous stockholders. I do agree that we could have been better informed over the PFS. Its been a trying time over Franks sickness and death. The management would have had lots to adjust to in the last 6 months. Many of the co's I own don't have up to date broker reports. Any report can only restate what is publicly known. We have lacked for a relationship with a broking house which would have promoted us to their clients. There is always a cost to these relationships. Frank made his own decisions and here we are now. The co is in good shape is my assessment and with all the cash it needs and an experienced board, more liquidity and new investors.
If any one can find a better short, medium or long term investment at these levels please let me know.
No judgement for thoes who have sold out.
CRK Price at posting:
35.6¢ Sentiment: Buy Disclosure: Held
