Post by
pmrider on Jun 02, 2011 2:42pm
Interesting Valuation
With approximately 33,000,000 o/s, the market is giving FDN a value of $4,950,000. Considering they have $2,500,000 in cash, the value of the deposit is $2,450,000. What's the market telling us? It has to be saying that the CS deposit is Moose pasture - right? Or are there other factors at work at the macro level? Seems that might be some of the answer as well as fear has once again gripped the market and June is traditionally the worst month in the markets.
Not sure that I buy that this is Moose pasture at the moment. If the deposit were a standalone, there would be case to be made, but there are many other companies in the immediate area and I suspect that if we total all the collective resources we would have something north of 5-6mm ounces. That type of deposit at $1,500 gold does indeed command a significant valuation.
Within the next 2 months, we should have our first 43-101 and from what I understand the expectations are for something in the 1mm ounces. This would not include the newly discovered Iris Lake zone and the resources at depth in the main zone. Not hard to make a case that we ultimately end up at 2+ MM ounces, but the market is not a believer (but it's not only FDN, it's other jr. exploration companies as well). I made a point of phoning some significant FDN shareholders yesterday and posed the following question: If you were a big buyer at .30+, how come you're not buying it now? The resounding conclusion is that they are tired of catching falling knives and their hands are bleeding. Although true, experience has taught me that this is probably the time that one should be stepping up to the plate and at least averaging down.
One other factor, is that there seems to be an individual or fund that has a "hatred" on for FDN. Since approximately the middle of April, BMO has made a concerted effort to down tick the stock at every opportunity with 500 lot sell orders into the bid. If this is someone that wanted to simply dump their position, that would have been possible at higher prices. This has more of a malicious tone to it. What is even more intriguing, is that as of May 16th, there is a short position of approximately 200k shares. This is approximately the amount of the down tick by BMO since the middle of April when all this nonsense started.
Now I'm not going to bore you with valuations, but suffice to say that this should be worth more that .15 - shouldn't it? Or am I missing something? Constructive commentary welcome.