2008 great year for VGM
The $.60 cent warrants from IPO are now expiring out of the money (Dec.07). The selling of late has been IPO holders who did not get to exercise warrants and are belatedly dumping their positions. The remaining VGM shareholders are Sprott Asset Management and investors focusing on the value of Los Verdes and Cuatro Hermanos as molybdenum / copper development assets of merit with management able to deliver production.
The capital structure is now clear of warrants / clear of shell holders selling paper and soon to be valued against NPV of Los Verdes. This is the basis for expecting a significant revaluation. Capital structure is now clean / VGM will soon be valued against NPV assets ... new buying initiatives can materially change share price of VGM very quickly in these conditions ... what will create new buying initiatives ?
During Q1.08 the feasibility for Los Verdes will be available. Bets are between $200M and $400M USD NPV with moly oxide price assumptions standard and similar to those used for other feasibilities (e.g. Ruby Creek / Moly Mines etc.). How will this compare against current market cap ($28M) ? ... NPV of Los Verdes could be 10-25X (10-25 times) today's market cap. This is going to be a significant catalyst for price revision ... expect to see $1.00-$2.00 handle. Feasibility derived NPV for Los Verdes(Q1.08)will initiate this revaluation ...
The Los Verdes deposit has the most robust economics in primary moly space (will be proven to have with feasibility study) / high grade ore with significant copper credits / low capex / low strip ratio / rapid payback ... Los Verdes will become a mine and robust economics will be manifest through feasbility study (expected Q1.08). This will be the first catalyst for real institutional buying interest & share price revaluation // and VGM capital structure is now clean .. new buying will quickly change price in the tight capital structure of VGM ... expect dynamic price action in Q1.08 ...
Drilling of Cuatro Hermanos continues / will continue unabated ... during 2008 the market will see and give credit to Los Verdes because of the feasibility report first, but then will also look more closely at Cuatro Hermanos and identify the potential for a world class porphyry system which is 100% owned by VGM shareholders ...
The Los Verdes feasibility will see/precipitate $1.00 -$2.00 share price handle (financing for production will likely be done partly debt / partly offtake / some equity) .... after this expect real renewed shareholder (institutional) participation in VGM ($1.00 - $2.00 share price handle) ... then analysts will begin to review and evaluate Cuatro Hermanos - a world class porphyry system in NAFTA country, 100% owned by VGM .. which will ultimately be the catalyst for major price revision $5.00+ share price handle.
VGM sellers today cannot appreciate the merits of the assets or have the misfortune of requiring/taking liquidity from their investment in the calm before the storm that will come with the feasibility report for Los Verdes. VGM shareholders will be rewarded in 2008.
Recommendation: take advantage of selling / market conditions and timing if you have some cash ... buy below $0.50 while it's still possible .. 2008 will be a very good year for VGM shareholders.
viva Los Verdes !!! ... Cuatro Hermanos lurks in behind ... 2 superb assets in NAFTA mining friendly country / experienced mining management / assets 100% owned ... if you're going to play moly space or junior base metals ... play VGM / 2008 will be a great year.
... expect the VGM share price rally of 2008 / starting soon.