"Reratings are often talked about and seldom observed, but it seems to me that if a transition from prospector to producer doesn't trigger one, then nothing ever will."
Couldn't agree more with the first part of your comment. Regarding the second part I think we have to look at what is priced into CNQ stock already. Production start certainly is and that's why it is not reasonable to expect the share price to move significantly when it actually happens. It was around July or so when we were told production start was scheduled for year end. In December we learned it had been deferred to February. No big deal. Everybody knows it's going to happen soon. So no surprise here and no reason for a re-rating.
Re-ratings are triggered when something happens that nobody had expected. A few months ago a gold miner near Kalgoorlie (SLR) announced copper had been found in its drill cores. That did trigger sort of a re-rating. Nothing spectacular but a re-rating nevertheless. SLR had been drilling for gold in the region for a number of years (and found quite a bit of it) but copper AFAIK was never even mentioned. From that day on shareholders were talking about what could be a major copper find and I think one can tell when this must have happened by looking at the chart.
CNQ has published its plan to become a meaningful tungsten producer. You know all the stuff about Phase 1-3, tailings, ore sorter, hard rock, etc. There is a long list of milestones that have to be achieved on the way. With every milestone achieved a little bit of risk is taken out of the equation and the final goal comes a little bit closer. Accordingly the market cap (not necessarily the share price) should move up in baby steps with each of these milestones achieved.
Things that could positively influence CNQ's share price are (for example) a better than expected off-take agreement, higher production rates, higher tungsten prices, a much increased resource/reserve, etc. I'd not expect a fully fledged rerating in these cases. What could trigger a major advance indeed would be an extremely attractive buy out proposal or something really unexpected. Like a gold-find in CNQ's drill cores, LOL!
CNQ Price at posting:
13.4¢ Sentiment: LT Buy Disclosure: Held
