RE:RE:RE:RE:RE:RE:2023 VGCX Revised Production Guidance - Misguided? Retail shareholders are a fickle bunch, often trying to time the market. They are usually late to the party when buying and often sell when they should be buying. Their decisions are often driven by emotion and the story of the day. Right now the media is selling the narrative that the price of gold rising won't occur until interest rates peak and start to fall and the US dollar weakens. Yet history has proven that this is not an absolute given. Here's an Investopedia link... the "KeyTakeaways" portion summarizes the info but the entire read is interesting.
The Effect of Fed Funds Rate Hikes on Gold (investopedia.com) In the case of VGCX and retail coming back into the stock if a hostile bid fails, that will depend on the narrative of the day. If the gold price stays around current levels and if VGCX can get their production up to their 200K ounces target and get real serious about paying down their debt, then retail will return. These next couple of quarters are going to be very important to watch. My quess is that the Institutional Shareholders see the value and potential of VGCX and that VGCX is likely at a turning point towards meeting their production goal and so are stealing as many cheap shares as they can.
Can VGCX share price go lower from here? Absolutely. But with each transaction their must be a buyer and a seller. So to answer your question about when this attack will end, the answer is actually quite simple....when retail shareholders quit selling their shares to those with much deeper pockets and a longer term investment time horizon than a few hours or days.
The questions retail shareholders should be asking themselves now are:
- Should I be selling now or is there intrinsic value in owning and holding VGCX shares over the next 12 to 24 months?
- Is there any hope in hell that VGCX can meet their 200K prodution target over the short term.. next 6 to 12 months? Will the second heap leach pad being built and nearly completed help to increase gold production?
- Can VGCX reasonably meet their debt payment obligations due from now to the end of 2024 and if so what will their balance sheet look like then and by extention their share price? In the next 6 quarters if they were to pay off even $20 million US per quarter where could the shareprice be?
- Is VGCX really sitting on a District scale batch of exploration properties and when will the larger Gold players start moving into the Yukon to acquire producing gold companies like Victoria?
- With John owning about 860,000 shares at an average price of about $8.00, what price would he be willing to accept in the event of a hostile takeover bid? Sub $6.00?
- Is a significant / major economc or geopolitical event likely to occur in the next 12 to 18 months that could drive the US (and other countries) stock markets down, and by historical likelihood drive the price of gold significantly higher?
- Why have Central Banks world wide been buying significant amounts of gold over the past several months and increasing their gold holdings?
- When will the US fiat currency printing press begin to seriously devalue the US dollar? Is the upcoming potential US government shut down just the start of what's to come if the US doesn't start getting a handle on their debt?
I see as I write this that gold has broken down below $1,900. Is the gold price being manipulated by Wall Street? Amazing really when you look around the world and consider all that's going on. A few months back, some on this board criticized VGCX management for entering into forward gold sales of 4500 ounces p/month at $1,887 for the remainer of 2023 and 2500 ounces per month for the first 9 months at $2,074. Well these forward sales are looking pretty good right now!
Lots to think about and many unknowns but one thing is for sure, VGCX shares are being beaten down intentionally. The technicals are indicating we are at or very near a bottom but Retail Shareholder selling will be the main driver for how low we eventually go.
This is very frustrating for VGCX longs but I'm seeing VGCX in a much better state by the mid to latter part of 2024 and will be waiting this one out. As the old saying goes.."This too shall pass!"
My opinion only, please DYODD
HB77