Kereport: THE HEDGELESS HORSEMAN – FRI 27 MAR, 2020
“Erik Wetterling joins me today to go down the list of metals companies and his thoughts on the value opportunities in each. We start with production companies that have also sold off and are looking attractive. Next are the developers and exploration companies that were washed out earlier this month and starting to bounce.”
CLICK HERE to access the podcast with Cory Fleck of Kereport.com
Can you please answer this question.
Why is Quinton trading Novo shares for any other companies shares? If he belives Novo is another witswatersrand then your trading a much more valuable company for ownership in an inferior company. This is analogous to Warren Buffet trading Birkshire stock for another comanies stock he has done it Once, and it was a major mistake. Can you please ask Quinton. Thanks
Daniel:
As you know the valuations of mining companies are absurdly low. As you also might know, there are almost no big discoveries happening in the gold space and the large miners need to find large deposits just to tread water. Kirkland Lake is for example expected to run out of the bonanza gold at Fosterville in just a few years…
With Quinton being one of the foremost experts on Epizonial Gold (Fosterville is such a system) it makes sense to me that he would want to be able to pick up 75% of potentially another Fosterville type of mine for a few million bucks. I mean Fosterville is only one deposit and it’s worth billions. Furthermore, it is much easier (and faster) to drill and confirm lode gold as compared to our nuggety “beds” in Pilbara.
With Novo having three different stakes in companies who have Epizonial Gold systems, they all could revalue quickly just by hitting on a few holes. Imagine KZR, New Found Gold and GBM would confirm three Fosterville type deposits. That would revalue each venture a lot in a hurry. Then Novo could decide if they want to sell it to the likes of Kirkland Lake (who will need more ore sooner rather than later) or potentially built it themselves from Cash Flow that will hopefully come out of Pilbara.
The think with Pilbara is that the near surface systems might require very little in terms of CAPEX or OPEX. That especially goes for Egina I would say. I mean a continuous miner and a few ore sorters is peanuts and if it works well, each “unit” could pay itself off and cover the expenses for a few additional units within 12 months…. So then the question would be what to do with the rest of the cash flow? Banks pay close to nothing so in order to compound the returns, when the necessary investment costs are covered, Novo would need to invest it somehwere.
Best regards