It’s over

I sold out this morning at a 70% loss. My average buy price was about 10.5c.

Before anyone accuses me of being a downramper, I invite them to look back through my posting history. I first bought OGX in early February, attracted by the back to basics investor presentation. I sold out today, because after 8 months it has become apparant that Orinoco Gold is approaching bankruptcy.

I have no doubt that the gold is in the ground, and I am still fairly confident that one day it will be economically recovered. But Orinoco Gold will not be the company that does it. This company is drowning in debt, to Cartesian Royalty Holdings, Anglogold, and now Magna. I feel like I need to remind some holders that the CRH gold stream is secured over the Cascavel project, meaning when OGX can finally not raise anymore funds to meet those payment requirements, Cartesian will end up with the project anyway. I have my own suspicions that some members of management have been acting in the interests of CRH, rather than shareholders. DYOR.

The latest round of management has shown contempt for continuous disclosure, and a willingness to out right lie to the market (although good luck getting ASIC to do anything about it in the junior spec realm). When things were looking positive in early 2018, I made the mistake of looking over certain red flags. For example, the opaque nature of the so-called JV with Anglogold, or the relationship between Jeremy Grey and CRH. I kept giving management the benefit of the doubt despite delays in commissioning, deliberate misinformation regarding the number of shifts operating on the hammer mills, and ridiculous assertions made by management (Anyone else remember the Q&A Ann a few months back?).

Confidence is shot, and I believe that in the absence of clear and transparent proof of production, we have to assume that nothing has been produced. They haven’t released August production because there hasn’t been any. If there was, they would have released that news as soon as possible to improve confidence. Twitter videos have been proven to be pure propaganda.

The processing mill is a failure, we know that. The latest turn to CIL may be promising, but I reiterate that OGX no longer has the time or access to funding to make that a possibility. Upon reflection, the story I bought was that the hammer mills were the turning point for this company. When it became apparant that this was not true in May I should have sold, rather than bargaining with myself that the company just needed more time. The lesson I have learned here is that when you invest in a company, you don’t just need to know when to buy, you need to have clearly defined criteria for when you will sell. Fortunately I’m a young guy, and I haven’t lost any money that I couldn’t afford to lose. To the long term holders here, many of whom I suspect have invested far more than I did, I express my condolences.

In summary, the real mine here is the share market, and CRH has been mining it for all its worth to recoup its lost investment in Cascavel. The dream is dead guys, it’s over. The HotCopper experts have disappeared, and it’s the amateurs like you and I who have been left without a seat when the music stopped. I sold today because I think a rush for the exit is imminent. To those that still “believe”, I say good luck. But please remember, belief is not an investment strategy.

Atlas