I would be cautious about buying charger not because they won't find something (I suspect they definately will because the whole Finniss area is pegmatite rich) but because in order to get to the point of being a producing mine, they are going to have to do a LOT of work.
That work will take years of drilling, shoring up and navigating red tape and will take many many millions of dollars of additional revenue they don't have at the moment, which just about always means that the shares will have to be diluted again and again in CR's. The lack of immediate returns means many speculators will pump and dump the shares and many of the holders will basically be forced to just sit patiently and wait for results to slowly come in until a viable mne project can be put together, if at all.
In fact, regarding the pump and dumps, arguably this has already been done hard as the share price after the IPO went up to 75 cents before it came crashing down again.
On the other hand, however, if they find something substantial, it's possible the share price could really jump or someone might move in to take them over and a number of people out there are speculating that CXO is the most likely candidate.
I'm not 100% on this bandwagon as their tenement isn't that huge and at their current price they would need to really justify the takeover first. You don't just drop 21 million + the premium on acquiring the company unless you know they actually got something. Hell our current tenement we are drilling has likely between 10-16 MT's and were only paying a maximum of 10 million for that IF we decide to do it.
Also, CXO could easily let them CR themselves into oblivion, let them do all the work and let their share price crash a bit and then in a couple years, move-in if it were deemed a prudent investment.
But ultimately you have to ask yourself this single question. You have a finite amount of money you can invest anywhere and the choice between the two with the price difference being decent but not massive. One (CXO) is almost certain to return a major profit in the next year, the other could easily stagnate and if it does show promise, will likely be the takeover target for the former anyway. And the likelihood of seeing your money depreciate with Charger is a hell of a lot higher over the next year than CXO. Equally, you never know, they could hit the motherlode.
Personally, my belief is if they actually are any good, then an offer might be made. The takeover price however is likely to be only a fraction of the realised gains so you might see a nice premium on the SP with Charger but I suspect its probably not going to be a huge grower from Finniss alone given the total size of their tenement there. And if that happens and a takeover does occur, then their gain really becomes CXO's not theirs and you simply get a premium on your holdings while missing out on any opportunity cost of not having sunk that same money into CXO and watch it continue to grow.
Alternatively, if you just put it into CXO we will have a little bit of a lull next year during construction where major announcements will be not as regular (except for construction updates) and the odd drilling update here and there (which if well-timed will steadily push the SP up) but either way, once it gets to production, CXO's share price is gonna really fly and will be multiples of what it is today.
You can buy their shares at 45 cents or ours at 59. Theirs could potentially do something epic but common sense says they have a long period of going through the development phase where interest wanes, the share price doesn't do too much and the shares on issue likely get diluted again and again and again. Alternatively, you get a sure bet with CXO as long as you have the discipline to hold them for a year.
But as usual, you have to decide what's best for you, what the likely outcomes could be, what your risk tolerance is and naturally you have do to do your own research.
Best of luck with it.
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