Monday, June 21, 2010

Back from Vacation

I've been away for 2 weeks and wasn't able to post the trading summaries that some of you requested.  The summary of house positions for the month of June follows.

Once again Production has posted a compelling analysis of our current valuation compared to a number of peers.  I've said it many times and I'll say it again, we have to contend with a huge management discount and have to rely on momentum retail traders.  We had started to regain some credibility with the monthly scorecards, but not meeting the stated goal of 500 - 800 tpd in May, combined with the CTO and a little bit of insider selling certainly took its toll.  The failure to name an independent Chairman of the Board is another hit to credibility and proves that Peggy is firmly in control.

All that being said, our share price continues to be a joke at $1200+ gold prices.  We have to be patient because no institution will pay any attention to production forecasts until we actually start meeting them.  If, as the new Lamaque video forecasts, we reach 1200 tonnes per day by the end of the year and 2000 tpd by the end of 2011, then institutional buying will ensure a much more reasonable valuation.  Earnings cannot be ignored. 

I expect we'll see a more positive update at the end of June and if so, the analysts tours in July may lead to some taking a position.  I expect the retailers that are selling at sub 50 cents will jump back in once there is a reversal.  In the meantime, I am continuing to accumulate at these prices because San Juan alone is almost enough to justify a 47 cent share price.

1 comment:

chillby said...

Thanks Carib...hope your vacation was good! Curious to know if anyone here has been following the Mt. Milligan Au/Cu project at all. I've been watching wannabees fail to mine that deposit for 20 years...and here comes little Terrane all of a sudden. Someone actually building a mine there...