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Good question, Roxy; I guess Blog members went into deep hybernation with the start of 2011. Or, we need a recovery period from all the holiday festivities?! Or, we are all waiting for the new CEO to say/do something?! Or,...??? GLTA in 2011!
In the mean time looks like the great wall of China above .54 I'll take out the 210000 shares @ .55 if you guys promise to take out each following number. LOL
Still here of course Roxy. I'll be here until we are a large, boring, slowly moving, fairly valued mid tier producer!
I think everyone knows we are progressing and we are just watching it happen and watching the stock progress and establish a higher trading range.
I asked Peter about when we would hear from Daniel and he said we should not expect to hear from Daniel right away. I think this makes sense as he JUST started and needs to get acclimated for a while so he can know exactly what is going on before he starts promising and projecting things.
Judging from these fast comment responses, certainly most of us, if not everybody, are still around. Believe most, including yours truly, are holding their breath to see whether this minor price burst is sustained n the upthrust continues. I strongly believe they will n expect an excellent year for all of us who are still holding the faith. There is no reason not to believe this 2011 is the defining year for CMM. Cheers!
The price will be scattered from 70 cents to $2.00+ depending on what other opportunities come up and how the PoG trends. I sold some today to buy into FNC as that long sleeping dog might finally awaken. However, most of my shares would be kept for another 6 months, when we are cashflow positive and into commercial production as I believe that is when we will have a fair reflection of our assets in our share price.
Glorieux, Of course if we reach a full fair valuation in 6 months that would be great, but just FYI from my experience it could take a bit longer to get the full value of CMM and selling in 6 months when we reach commercial production might leave a lot of gains on the table.
In late 2011 we are going to reach full scale production and I'm finding in these revaluation situations often the most profitable price movement comes by waiting a full year AFTER full throughput has been achieved.
An example I use a lot is First Majestic. It took a long time for them to get credit for having moved from a junior silver producer to a solid mid-tier. But the year after they reached a new level of production is when the market cap went from 500 mil to well over 1 billion gradually.
Also, going back to CMM - from 2011 and 2012, hopefully the Peru operations will go from 20k to 30k and our resources will continue to grow, so this story has a lot of "legs" beyond when we reach commercial production.
WF, It's hard of course to give a specific number because there are several unknown variables involved including POG, the results of updated 43-101 and also how peers perform relative to POG and the macro stock market in general.
With all that being said, if we assume POG stays around the same as do our peers relative to POG, and if we assume there is minimal change in resource base in the next 43-101, if we successfully reach a production rate of 110k+oz a year at a cash cost of around 600, a fair value vs peers would be very roughly 1 billion in market cap in my opinion.
Depending on the number of shares outstanding at the time, this could be a stock price of at a very minimum of 2 dollars up to 2.50 or so.
However, I do not believe we will hit fair value as soon as we hit commercial production. This company has been through a lot and it will probably take at least a couple consecutive quarters of our full production rate for the street to fully believe our turnaround story and price us equal to peers.
However, ultimately if the price of gold continues to go up and our resources expand (two very likely scenarios) then I believe these targets will have proven to be too conservative.
I consider 6 months and 10 months still relatively "short term." Short term is much more of a crapshoot but for what it is worth I think there is a good chance we will continue to form higher trading ranges in a stair step movement followed by boring consolidation periods and corrections which would ultimately lead us to a 52 week high before the end of the year around or above a buck.
Important pieces of positive news of course could cause some nice spikes along the way that will improve our visibility and expand our shareholder base to help this all along.
Thank U for the valuable piece. Will bear that in mind. Although I have a more robust figure of $1.50 expectation by year end, I am inclined to agree with your other points n qualifications. Thanks again. Cheers!
WF, Yes, I am also very confident we will hit 1.50, just slightly more conservative on timing. I think assuming similar POG, in mid-2012 we definitely are at 1.50 minimum. Of course any upside surprise could accelerate this timeline.
I also wanted to share that I found out the hard way by selling many revaluation equities far too early that the reason nothing else beats buying a severely undervalued turn around story like CMM and holding it until it reaches fair value is just due to the mathematical principles of leverage.
For example, when CMM was trading at the ridiculous price of .40 not long ago, it took a 20% gain in price for CMM to increase by .08 (and for shareholders to make .08 in paper gains for each share they hold)
In the future, when CMM is trading closer to it's fair value at 2.00, it will take a mere tiny 4% gain for us same shareholders to make an additional .08 in paper gains for each share we hold.
At 2.00, a 20% move like the one it took us to go from .40 to .48, would now take us to 2.40, which is an additional massive 100% gain for the original .40 share.
So in this case, where we are many multiples undervalued, the biggest rewards will go to the patient that stay the course. Staying just for the first pop is like going to a fine steakhouse and leaving after the soup!
I've done that far too many times so I definitely will not repeat that mistake this time and urge others to stay the course as it will be worth it.
As another example as to how the revaluation occurs AFTER commercial production is achieved, check out Gold Resources Corp (GORO). They achieved commercial production in mid 2010 and have been on a revaluation tear after that. It would have been a major mistake to sell once they achieved commercial production in mid 2010 at 12 since they are now at 29 and IMO may reach 40.
18 comments:
Good question, Roxy;
I guess Blog members went into deep hybernation with the start of 2011. Or, we need a recovery period from all the holiday festivities?! Or, we are all waiting for the new CEO to say/do something?! Or,...???
GLTA in 2011!
Still here Roxy. Nothing to get too excited about yet. BTW, thanks for the tip. Cheers!
No problem rhump. Were all in this
together to make $$$$.
Also believe cmm is getting ready for a major move this q.
In the mean time looks like the great wall of China above .54
I'll take out the 210000 shares @ .55 if you guys promise to take out each following number. LOL
I think everyone is Just Holding there breath and hoping we keep Climbing. 2010 was tough, but 2011 SHOULD prove beneficial to the pocket book.
Market is definitely waiting to hear from the CEO. I'd love for him to reach out to shareholders, even if just to say hi.
It's going to be a good year.
Still here of course Roxy. I'll be here until we are a large, boring, slowly moving, fairly valued mid tier producer!
I think everyone knows we are progressing and we are just watching it happen and watching the stock progress and establish a higher trading range.
I asked Peter about when we would hear from Daniel and he said we should not expect to hear from Daniel right away. I think this makes sense as he JUST started and needs to get acclimated for a while so he can know exactly what is going on before he starts promising and projecting things.
Cheers,
RE
Yea Real maybe after his 3 weeks at
lamaque
Judging from these fast comment responses, certainly most of us, if not everybody, are still around. Believe most, including yours truly, are holding their breath to see whether this minor price burst is sustained n the upthrust continues. I strongly believe they will n expect an excellent year for all of us who are still holding the faith. There is no reason not to believe this 2011 is the defining year for CMM. Cheers!
Still here, just waiting to get paid for my DD.
and at what price would that be Gloriex?
The price will be scattered from 70 cents to $2.00+ depending on what other opportunities come up and how the PoG trends.
I sold some today to buy into FNC as that long sleeping dog might finally awaken. However, most of my shares would be kept for another 6 months, when we are cashflow positive and into commercial production as I believe that is when we will have a fair reflection of our assets in our share price.
Glorieux,
Of course if we reach a full fair valuation in 6 months that would be great, but just FYI from my experience it could take a bit longer to get the full value of CMM and selling in 6 months when we reach commercial production might leave a lot of gains on the table.
In late 2011 we are going to reach full scale production and I'm finding in these revaluation situations often the most profitable price movement comes by waiting a full year AFTER full throughput has been achieved.
An example I use a lot is First Majestic. It took a long time for them to get credit for having moved from a junior silver producer to a solid mid-tier. But the year after they reached a new level of production is when the market cap went from 500 mil to well over 1 billion gradually.
Also, going back to CMM - from 2011 and 2012, hopefully the Peru operations will go from 20k to 30k and our resources will continue to grow, so this story has a lot of "legs" beyond when we reach commercial production.
RE
Hi RE
While anticipating commercial production in Q2 n full prod in Q4, what is your sp expectations come mid 2011 n end 2011?
WF,
It's hard of course to give a specific number because there are several unknown variables involved including POG, the results of updated 43-101 and also how peers perform relative to POG and the macro stock market in general.
With all that being said, if we assume POG stays around the same as do our peers relative to POG, and if we assume there is minimal change in resource base in the next 43-101, if we successfully reach a production rate of 110k+oz a year at a cash cost of around 600, a fair value vs peers would be very roughly 1 billion in market cap in my opinion.
Depending on the number of shares outstanding at the time, this could be a stock price of at a very minimum of 2 dollars up to 2.50 or so.
However, I do not believe we will hit fair value as soon as we hit commercial production. This company has been through a lot and it will probably take at least a couple consecutive quarters of our full production rate for the street to fully believe our turnaround story and price us equal to peers.
However, ultimately if the price of gold continues to go up and our resources expand (two very likely scenarios) then I believe these targets will have proven to be too conservative.
I consider 6 months and 10 months still relatively "short term." Short term is much more of a crapshoot but for what it is worth I think there is a good chance we will continue to form higher trading ranges in a stair step movement followed by boring consolidation periods and corrections which would ultimately lead us to a 52 week high before the end of the year around or above a buck.
Important pieces of positive news of course could cause some nice spikes along the way that will improve our visibility and expand our shareholder base to help this all along.
RE
RE
Thank U for the valuable piece. Will bear that in mind. Although I have a more robust figure of $1.50 expectation by year end, I am inclined to agree with your other points n qualifications. Thanks again. Cheers!
WF,
Yes, I am also very confident we will hit 1.50, just slightly more conservative on timing. I think assuming similar POG, in mid-2012 we definitely are at 1.50 minimum. Of course any upside surprise could accelerate this timeline.
I also wanted to share that I found out the hard way by selling many revaluation equities far too early that the reason nothing else beats buying a severely undervalued turn around story like CMM and holding it until it reaches fair value is just due to the mathematical principles of leverage.
For example, when CMM was trading at the ridiculous price of .40 not long ago, it took a 20% gain in price for CMM to increase by .08 (and for shareholders to make .08 in paper gains for each share they hold)
In the future, when CMM is trading closer to it's fair value at 2.00, it will take a mere tiny 4% gain for us same shareholders to make an additional .08 in paper gains for each share we hold.
At 2.00, a 20% move like the one it took us to go from .40 to .48, would now take us to 2.40, which is an additional massive 100% gain for the original .40 share.
So in this case, where we are many multiples undervalued, the biggest rewards will go to the patient that stay the course. Staying just for the first pop is like going to a fine steakhouse and leaving after the soup!
I've done that far too many times so I definitely will not repeat that mistake this time and urge others to stay the course as it will be worth it.
Cheers,
RE
As another example as to how the revaluation occurs AFTER commercial production is achieved, check out Gold Resources Corp (GORO). They achieved commercial production in mid 2010 and have been on a revaluation tear after that. It would have been a major mistake to sell once they achieved commercial production in mid 2010 at 12 since they are now at 29 and IMO may reach 40.
RE
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