TSX:LSG.DB - Post by User
Post by
TedOwenson Jan 26, 2011 9:14pm
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Post# 18032236
Stock price suffering
Stock price sufferingThe recent stock price dip even after a series of relatively decent press release instances is reinforcing the notion that the market had probably overvalued LSG from the time of the big June 2009 Thunder Creek discovery and is expecting more than what was subsequently returned afterwards almost two years later. The longer it takes to reproduce such an event again, the longer the strain period will be on the stock so it appears that the analysts who stated the LSG was overcapitalized were not far off.
It appears that market expectations surrounding Timmins area properties dictate higher return thresholds for project size and scope than what other less mature camps and are expected to return, which will ultimately put more pressure on LSG to perform at such levels to meet those expectations and every time they don't, the share price reacts negatively. Unless there is another really big hole to match the 2009 Thunder Creek return, LSG's value will be closely held to the price of gold for a while yet. The latest assay releases, while well above average for almost any project in Canada on a relational level, look almost downright negative if viewed at on a historical basis within the camp.
Sometimes operating within a region that has historically produced superior world class gold deposits akin to the big three, gives even above sector average returns a bad rap.
The good news is that at the rate the LSG is pulling premier gold environments out of the ground on average, makes a significant discovery, in the not too distant future, a strong possibility as rumors abound on some interesting project developments further west.
T.O.