RE:RE:RE:RE:RE:First time in 35 years?Right, if you want to compare them to other exploration- or development-stage mining companies, there is simply no comparison. Most juniors move at a snail's pace, putting out a few press releases a year, as often about what they plan to do as about what they have done. When you get a press release, you think, who were they again? What do they do? Do I still own them? Wasn't this stock at a dollar before? Wait a minute, why do I own an odd number of shares? Was there a 1:6 consolidation? 1:60? I guess it's not worth much any longer, why bother to sell it? Yet although you cannot really figure out what they are doing, you are paying them millions in salaries, fees, options, deferred shares, etc. And the G&A with all the lawyers, accountants, listing fees, etc., is killing you slowly. (Or not so slowly.) And then, quite a lot of these "exploration" companies, which seem to lack a credible exploration programme, seem to do a good job of exploring investors' pockets. Most do it in an open way, and many do it in a concealed way, which I will not spell out for you, but sophisticated, experienced resource investors will know what I'm talking about.
Here we're paying them millions a year, but at least the comp scales reasonably to the company size, and also I know they are working hard, and well, at productive activities, advancing the projects, which is more than I can say about the vast majority of peers. In my view, there are really only a handful of firms you want to back in this sector, if at all. The question is, do you want to be invested in mining at all? This is a dismal industry with high volatility and risk, and low returns. And do you want to be invested in Africa? Here the rule of law, and political stability, are very much in question at all times. For most people the answer to these questions should be NO and NO. For me, there are a few redeeming qualities to this issue.
1. Mining is a boom bust industry, and we have not had a boom for a while. It may be coming.
2. The assets, as everyone here knows, are unparallelled.
3. The management is the best you could ask, competent, with integrity, and with the track record and skin in the game.
4. The valuation for most of the company's history has seemed well below a fair value for what they've got.
I personally think mining is an awful business, and every jurisdiction sucks. So given all the other favourable factors, I'd rather be in Africa, which I think is not much worse than anywhere else. By the way, on the bright side, no permitting problems, no extraordinary environmental or regulatory delays or costs. Cheap labour. Just, you have to cut them in on the deal. Possible conflict in Katanga. To date, in spite of all the headlines, it has not reached Haut-Katanga or Lualaba, or impacted operations at all. But it may. We shall see. I also think the copper price is headed north. If the global economy keeps chugging along, timing could be perfect for production at a time of acute deficit. Let 'em have a 3-6% sliding royalty. Share the wealth, as there's plenty to go around.