RE:A very nice day indeed. Could "something"I think that institutional investors are stepping in periodically accumulating a position. There is no denying that the Hobe Bay mine is a great asset.
The good things about the mine are:
1) Located in a safe , politically stable jusridiction = Canada ... mining rules unlikley to change
2) The native groups are supportive of the project = they profit from the project
3) The deposits (Doris, Boston & Madrid) are significant, high grade and open for more exploration/extension
4) The conpany controls not just a property but an entire regional play... this is a significant plus. Eventually this will be a catalyst for a takeover bid.
5) The company is doubling throughput and any/all additional incremental gross margin will hit the bottom line
6) Company is solving operational challenges... takes time... no show stoppers that can't be overcome
7) Exploration & Development potential
The project neagative are:
1) Higher operating costs due to northern location... mitigated by increasing scale of operations
2) Balance sheet weekness... mitigated with increased production and growing cash flow generation
4) Operational challenges.. can be solved with proper ore processing and equipment investments and operational management effort
The big uncontrolable risk is the possible decline in the price of gold which is currently on the higher side of long term historical and has had a narrow trading range for the last 3 yrs (1060-1370). The Canadian dollar fluctuation has actually made the trading range even more narrow.
Longer term the US has been running huge deficits. China is gainning Significant World Economic Influence and eventual Future Domination.
a) China's metal exchange (and Russian support) competing with LME
b) Chinas Infrastructure bank competing with US/German controlled IMF
c) China's increased influence in the UN
d) US retraction from world stage and China/Russian expansion
e) Growing Middle class in China/India = domestic standard of living increases... resulting in increased consumption
f) China's control of US debt
g) China & Russia increasing gold reserves... China & Russia reducing US debt securrities.
All this points to a weaker US $.. and global uncertainty... flight to gold for security.