RE:THE BOTTOME LINE BlueChipper2020 wrote: Dear all,
I have posted about FVL many times in the last 1.5 years. However the market thinks differently and you may want to note the following:
1. The Company as of June 30 filed FS had about $23M in cash with a monthly burn rate of just over $1M. By the end of the year they will finish with about $16M. That is significant for most juniors, however read below.
2. FVL has a legacy number of 6M ounces which includes 4.5M inferred ounces. The Company has increased the resource the past 1.5 years, however whatever the count is after the completion of this drill program won't be until mid next year. The current drill program results are moving at a snails pace which is significant since there is a cash burn. An 43-101 updated resource won't be until sometime next year a the earliest and I have my doubts on that. They need a lot of drilling to come up with a larger new number and movement from inferred to measured and indicated, and even then it is not proven and probable reserves for what I say below.
3. FVL is losing or has lost the drilling/dillution race. The drill results are perceived by the market has uneconomical grade, at the grade and depths which have been released. There have been the occasional very high grade hits but intersections too small and too deep. At $1800USD gold this project only started to become interesting. I emphasize "started". The drill results the past year have not been received well by the market considering the price of gold. As the price drifts lower, the next financing will be very dillutive. They need to do a lot of drilling on this property and the market knows that that to raise another $10-$15M later next year will be very dillutive. The June FS show the majority of warrants expiring particularily the ones at higher prices of $1.65. There are a lot of cheap warrants outstanding including those at $0.08 which won't raise a lot of cash. The o/s shares are at 334M right now. NFG won the dillution race. They can raise massive amount of money by issuing a low number of shares since their drilling results were loved by the market and pushed it to about $10 per share. FVL needed drill results this past year to keep the price at least $1 to $1.5.
Considering the above I sold the remainder of my position last Friday. I do not believe any one hole will turn things around here. What happened in May 2020 was a perfect storm. Hole 2001 hit and hole 2002 showed the first 10metres at shallow at about 2gpt before drilling was stopped due to Covid. The market perceived that a larger high grade economical section may sit between these two holes followed by the moving gold price and low float of about 220M shares pushed this price to $1.95. However, more is understood here and the dynamics have changed.
I may buy shares in the future since there is a long term terrific story here. However that will be after a lot of dillution with ES winning either way. ES will buy into a dirt cheap PP with cheap warrants most likely sometime next year. However, this is not his main focus and Newfound land is.
All the best to longs.
BC
I'm shocked to see you go but best of luck to you BC.
I'm personally choosing to hang on this ride because as you say... an extraordinary hole could be just around the corner.
There are 43 holes left I believe. I'll wait for these results before I make my decision but I'm praying to god these results come soon. I'm extremely disappointed with how management took the life out of this stock and letting the price tank.It has been stressful. However, I believe there may be a happy ending here and I wish you longs nothing but the best.