I have been researching the junior resource sector since 1994. During the early stages I made a number of mistakes, spread myself far too thin in low quality "promoter" plays but have eventually developed a keen eye for value and the all important risk/reward profile that should form the basis of any form of speculation. My greatest successes in the sector include raising $4m for IGO (seed capital and support), a similar IPO in MML (Went above $8.00), Ramelius that 50-bagged on 48m @ 154 g/t gold (Wattle Dam), and Northern Star that provided some with 100x their investment.
I have no idea how anyone can hold this long but a combination of belief and inertia can work well. Many lotto players would spend in a year what many have invested in a junior that has become a mid-cap and beyond yet are against 55 million to one odds. How I operate in the stock market is pretty simple really. I identify the mining companies of tomorrow by backing the right juniors yesterday. (work that out). I don't trade on breakout systems or become a believer at or/near the top of a bubble. It is all about quality people running top class juniors that will get on with business and not try to appease anxious short-term traders looking for an exit.
RDM I believe is the best junior resource company on the ASX and this is based on,
* Top shelf management and technical team. Anyone that knows Rob Rutherford and how he operates (building a portfolio of monster targets) would be impressed. Joshua Pitt has created millions in wealth for speculators and is one of the biggest backers of the junior resource sector.
* Maronan lead-silver-copper-gold resource. Here we have 30mt @ 6.5% lead, 106 g/t silver at a whopping 3.4% copper equivalent. Then add the 11mt at 1.5% copper and 0.8 g/t gold which still comes in at 2.1% copper equiv. There is also the potential for a Cannington at depth with increasing zinc-silver and wider zones of copper-gold (shame about this really).
Now for this project there are two magic words and they aren't "Annacott Steel". For those familiar with potential mining operations it is all about "soft ore" and this is the real cheesecake with Maronan. This project is worth double the current valuation (25c+) so if you are taking a band analogy it is one heck of a "rhythm section".
* Leichhardt which is coming up for drilling is a massive Ernest Henry style copper-gold target. Not many juniors will get anywhere near a target of this magnitude. Extremely high risk and like any project of this nature long odds but at least we have a ticket in the draw.
* Now speaking of monsters, Lawn Hill is only part of a 27km long basin with the scope for ginormous discoveries. Rob Rutherford and the team have worked tirelessly to secure this major opportunity for shareholders. Show me another listed junior with this potential?
* Punt Hill and Pernatty Lagoon are the next in line. RDM aren't looking for the odd high-grade hit here, they are chasing a Carrapateena look-a-like. This is in the order of 134mt @ 1.5% copper and 0.6 g/t gold. There is another one of these out there and RDM have again provided shareholders with the best opportunity of a massive discovery.
* An emerging project pipeline that will provide shareholders with an on-going flow of "powerball" targets. Even the much cut and pasted Tennant Creeks could yield something of the order that ERM have been hitting in the NT.
I know what it is like to be involved in a major discovery. Hotcopper posters can bemoan an apparent lack of share price movement and/or interest but those that have drilled into a mine or one that has the potential to be a mine have all come from low bases.
I go back to the old MNG that was 10c before it drilled into Prom Hill, Sandfire got down to 5.7c before they found DeGrussa, and Sirius were down to their last $50,000 and responding to an ASX query prior to drilling into Nova/Bollinger all from a 5.7c share price base. I could go on but it is clear that there is a pattern emerging and the lack of movement in RDM is hardly a concern. In fact it provides speculators with a chance to own something for "real" instead of going their investment careers with "should haves" and selling out the bottom due to the odd negative post.
The likes of RDM are what I refer to as "zombie" stocks meaning that they simply go about the business of building a suite of projects and then actually drilling them, rather than jumping from fad to fad in the hope of short-term spikes in the share price. This isn't how you become a serious player in the market. The only long-term approach that works is to build holdings in the zombies and perhaps trade some rubbish around to alleviate boredom.
I am certainly looking forward to the upcoming drilling programs that in the event of a discovery will send this into triple figures and have speculators scrambling for positions as they tend to buy on results rather than the anticipation.
No excuses here, there has been plenty of opportunities to buy as low as 12.5c in recent weeks. Good luck to shareholders, we could not be in better hands nor have a more exciting drilling program ahead.
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