Travelling on hol's but time to put some quick thoughts down....

OriginallypostedbySilverTeenager

hi2ic,areyoustillinvestedinWaf?ImissyourinsightsontheWafthreadmate!BeenwatchingCdvforawhile,sinceIexitedinthelow50sthisyear!Cdvmightbeworthapuntat29c!Butwouldbemuchhappierinvestinghereoncefinanceandacapitalraisehappens,Igotburntonwafforjumpingintoearly!ButgreatplayongoldpriceCdv!$1600usdnextcouplemonthsisonthecards!CheersST

Travelling on hol's but time to put some quick thoughts down. Only hold a token amount of WAF shares now, rolled that money and profit into CDV....doh. Only a mistake in my trading, timing wise fine but not taking profits was a mistake. WAF was way undersold at 23c based on BF terroist risk but then probably got ahead of itself on terrorist and mine ramp later on. A significant terroist risk remains priced in whether or not that risk is material imo, one bad headline away, share price is the bottom line. WAF tried unsuccessfully to sell Sanbrado or do a JV deal but failed during 2018 before doing a CR and going alone. I doubt anyone will make a TO play in the near future.

I viewed CDV as an oversold bargain, higher probability for a corporate deal and step change up in valuation. The DFS downgrade was a stumble I didn't see coming, although most of the market knew apparently. Most on HC agreed selling was option related, some suggested manipulation by parties interested in a TO, nobody called a large opex blowout. Unfortunately, the way market was mislead by Archie has killed any confidence in the stock or what is actually going on behind the BS. Nearly everyone not inside the tent has been burnt by false guidance on timing and FS outcomes. This virtually guarantees the share price cannot rise through the hundreds of dead bodies until the doubts and uncertainty are removed. Sellers wait at every price level to 'get their money back' and undo bad buying. Although common sense says a corporate funding deal is in shareholders best interests, fear and distrust rules as more timelines are broken. Cum-funding is an ugly time to be invested as CDV proves yet again.


Yes, that Junior Exploreer Price Cycle chart again. WAF is riding the chart back up during development from the final CR plus terroirist fear lows. Textbook stuff. CDV is still saddled with the final funding risk, stuck in a binary gamble priced holding pattern with CR fear and management distrust. Small short term changes in the gold price do not effect the price of a corporate deal, corporates will have a gold price deck view over the next 15 years which will not alter on a weekly basis. Of course the share price will creep up or down with gold price and market confidence, but only slightly given CDV is a binary gamble with lots of sellers waiting to get their money back. CDV is bouncing alomg the value bottom where even jaded traders won't sell but bargain buyers are tempted back in. Unfortuanetley that bottom is 10-15c lower than if the DFS matched the PFS in Opex and NPV metrics. Low volumes, easily pushed up or down a cent, all while time builds fear that nobody is interested in a deal Archie will accept meaning an ugly CR alternative.

I correctly waited for WAF's final CR before jumping in, so why am I invested in CDV if that final CR low still lies ahead? In short, I judged the June selloff into a delayed DFS as falling too far below even orphaned FS low value in the face of a rising gold price. A rise of $200/Oz rightly outweighed the FS blues as fundamental value for a 54M Oz deposit increased while option and delayed DFS selling pushed the price down. Correctly called, unfortunately the DFS downgrade and missed timelines ultimately cancelled out the gold price increase and reversed the price breakout. Months on and we still wait for an EPA permit which will allow funding to be progressed, be it corporate or market CR. There is no reason to buy up CDV on short term gold price jumps given the timing and funding uncertainty. Traders will not try and chase a stock that will likely still be in a vacuum holding pattern end of January still waiting for EPA permits. Dead money and dead time right now, has been for months in hindsight.

Both WAF and CDV are excellent studies of the junior explorer development price cycle. So many lessons and proof of concept, confirmation bias and group think may say this time is different but it rarely is. Timelines and news flow are critical factors for getting in and out. Ultimately the pressure is downwards despite other supportive factors until the fat lady has sung, the fat lady being the final funding sorted. You have read my opinions on that score, both a CR or corporate action are almost ruled out until we know what material environmental action, social obligations, compensation and other costs come with the final EPA approval. Who knows when that is really due, Archies been tooting his whistle since beginning of Sep all the while knowing that the EPA paperwork was still many months from submission, let alone permits being issued. Hope I'm right that Namdini is attractive enough to catch a corporate funding deal and that Archie is thinking of all shareholders, not just a million dollar per year job for life. Regardless, there is enough uncertainty that buyers are just not prepared to chase CDV or bet more on a corporate deal unless at bargain prices.

Downrampers will have a field day over Jan if the EPA permit drags, fear that no corporates were interested after due diligence etc. Unable to rise with a rising gold price, probably easy to push lower into a falling gold price if this current breakout proves false. I would have been largely sold down had I known of the DFS downgrade and the EPA permit delay well past early in the year guidance, except both became apparent in the 30's and too late for much use. 20's are for more accumulation imo into a corporate deal I see as odds on. Remember that all the downgrades, delays and distrust are already priced in by now. The market knows a CR risk looms large and the market does not like gambling unless a decision is close at hand, which probably isn't the case.

Time will tell and CDV, like all cum-raise development stocks, is not for short term trading the gold price action. I am encouraged by the current gold price breakout from the Sep downtrend but not confident it will hold without a $1450 re-test. Too many macro drivers against gold in the short term, I think the commercial shorts will fight back from this short squeeze in the first qtr next year though happy to be proved wrong. Truth is, despite my and the market's distrust of Archie and how he tried to manage the stock over 2019, I would buy the same large holding I currently own at 29.5c today.

Good luck

PS I should add that Canadian tax loss selling ends tomorrow.