Valuation

This stock is on my watch list after their push into North America and I feel many sophisticated retail shareholders in Australia are watching with great interest. I like what I see but am neutral on valuation given move up in last six months since the shareholder debt was repaid. The drilling below current resources looks really interesting but grades are two low to get me excited just yet and structural complexity is high which can lead to the need for lots of drilling to unlock understanding. Looks like they are adding mineralisation albeit it is hard to get a sense of widths as is normal at this early stage. I feel they would not bother infilling these new areas to a JORC resource until they hit a couple of holes with serious grade (well past 1% CuEq ) to underpin economics and/or have a sense of atleast a doubling of resource tonnes for economies of scale and a potential cave operation. The idea of vectoring to the higher grades and potential coalescence at depth is an exciting prospect. The stock could easily double in value with just a couple of standout holes. I agree with management too that the greatest impact is finding a shallow high grade centre for another low strip open pit but to date this has been elusive. I like the idea of cash going to this initiative though.
SolGold is also a good prospect but I prefer XAM even after the SolGold valuation drop of late. SolGold is a much newer discovery with much less money spent on it with a big corporate shareholder and it has been well promoted so it has lots of market appeal but I see downside on the release of the maiden resource.