On this site we have several posters who know what the nuts and bolts of mining is all about. I don't and feel indebted to those who debate these issues in depth. 71c4 makes a lot of down to earth good sense.Being a bruised and battered long market player my occasional posts are about current vibes I.e. market sentiment.
Make no mistake about it- we are in turmoil.Despite our excellent fundamentals the negatives swirling through the minds of the punters would be something like this.
1) You are a fledgling gold producer but the gold GP is wavering with many pundits forecasting that it will go lower. We know from experience that they are often wrong ......look no further than the discredited "Elvis Index"to underline this point. I cannot make a forecast but the Asian relentless accumulation cannot be ignored.
2) the albatross around our necks. Others have tried and failed to mine Deflector.......can it be done this time? Despite assurances to the contrary, the punters remain sceptical,regardless of the fact that past attempts were somewhat too "gung ho".Short term sentiment is erroneous....smart traders exploit this.
3) Finance. CS have stated for whatever reason that the outlook for the gold GP is bearish and they are the key for putting bank finance in place.The hedge could prove to be invaluable as a negotiating tool.Gold mining finance is even more difficult to get in current circumstances and foregoing the hedge in return for finance approval might just be enough to "tip the scales" Pure speculation but a nice ace to have up your sleeve.
4)The bear pit.As the mini boom in pursuing yields in blue chips is peaking....with a correction possible....the punters will be looking to get their hands dirty by looking for opportunities in the "swamp" which we dwell in. Anything is possible,but with all those Jorc compliant goodies in the ground with the likelihood of more to come, combined with the low SP, a takeover bid could well be lurking in the shadows. In the final analysis this melon is just too juicy to be ignored.
MYG Price at posting:
8.3¢ Sentiment: LT Buy Disclosure: Held
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