RE: A picture speaks a thousand wordsHi, tictactoe111,
While I understand your angst, I think I agree with smilewithme that we are near or at the lows here. Yes, the chart is ugly, and the market has taken a "show me" attitude to the company. On the other hand, therein lies opportunity. GSM will shortly have a joint venture partner confirmed for the flagship Monte Cristo property, and $3mm is slated for drilling there. I think this is the significant departure point from the past.
In 2007, GSM took two body blows from VSA. VSA approached GSM (not vice-versa) and represented that they could raise whatever amount of money GSM needed to drill all their properties. Tony and Ruth spent a lot of time calculating a ~$7mm figure to do that, and VSA failed to raise anything, at all. Then, VSA modified their stance and said they could raise $2mm for Monte Cristo alone. Again, they raised nothing.
This wasted time and effort hit GSM hard. Their focus had been on getting rolling in a big way on the properties for the entire first half of the year, and not only did that effort get wasted but the opportunity cost of not having other productive efforts during that time, really hurt. Then, last Fall, they raised some funds and--although they found some gold--they missed a big intersection.
With 2007 year as the current backdrop, I'm actually pleased the stock hasn't fallen further. GSM stock is apparently in strong hands.
And, this leads us up to the present. Absent VSA, GSM is taking matters into their own hands and starting off the year in strong fashion. It's just not yet reflected in the stock price, because the market wants to see results,first. But now look where we are at the moment. In the last two or three months, GSM has:
* Optioned an attractive nickel property and raised funds in a PP to do preliminary work on it;
* Raised additional funds in a PP that was oversubscribed;
* Optioned the San Francisco property so that that property can be moved forward (it wasn't going to get much work right now from GSM, anyway); and, most importantly,
* Created a JV that aims to expend $3mm on the Monte Cristo property alone. This is huge, IMO. That $ amount is 50% more than VSA stated they'd raise for Monte Cristo.
GSM is an exploration play, and the ultimate story will be told by the drill bit. It's a calculated risk, just as any investment is. On the other hand, we know there is gold at Monte Cristo, and the JV will drill right close by. As ever, the best place to look for gold is next to where there already is gold.
On top of all this, GSM still retains 100% ownership of their other three, excellent properties--Gold Basin, Blue Sphinx, and Gold Springs, and is free to do their own work on them or do additional JVs as they choose.
I believe the best yardstick to judge an exploration company is to assess the extent to which the management team has made discoveries in the past. Tony and his team have done that. They've found properties with Amselco; located the Carolinas properties, and found gold in the McLean pit at Monte Cristo by drilling deeper than prior operators and explorers went. IMHO, his and his team's geologic and detective skills are among the best in the business.
All this doesn't ensure success with the upcoming drilling at Monte Cristo. GSM remains a calculated risk, and these veins are hard to find. But I believe our odds are enhanced, not diminished, with Tony and his team. It appears they finally have the resouces to do their thing. And, if GSM finds another epithermal vein, look out--those veins are very rich things. Your chart will change in dramatic fashion.
GLTA!