PINL:VLTAF - Post by User
Post by
eebleron Jun 13, 2010 7:29am
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Post# 17184029
Warrants and Technicals
Warrants and Technicals
Got a little frustrated Friday...apologies to the board as I don't want to see this board go the way of so many others.
Well, there is some solace in the fact that a lot of the other junior exploration companies have been taking a hit in the last while. Not a lot of solace in the sense that there's nothing left to use to average down and at this point I'm not sure I want to do that.
What I always find "interesting" (and frustrating) is that when warrants are going to be exercised the market is so reluctant to let the holders make some money off them and the price gets whacked back to where the warrants are going to be exercised. There isn't much difference between someone who has managed to buy VTR in the 0.30's and 0.40's that chooses to sell up over 1.00. They made a good business decision and now are able to capitalize on it. How does someone else know that when they pay 1.50 they aren't buying their shares from someone that paid a fraction of that cost?! When 1M shares trade hands in a day, whose to say the majority of those aren't someone that is now making a killing on their investment? There are probably many that could afford to be in VTR to the tune of 10's if not 100's of thousands of shares, especially given where VTR's price came from. That isn't much different and yet there is this artificial pressure to bring the price back down so that when the warrants are converted they can't instantly go off and sell them for a profit. Who says they are going to sell right away? I've seen it often enough to know better, but it still doesn't make the drop any more palatable.
The technicals on VTR are making for some tough decisions ahead. A triangle top formed off the 1.79 high to now, and trend analysis and previous support levels are suggesting some good buying opportunities ahead for those that have the cash to spare and are willing to try to call the bottom, or even just average down. Do your own dd on it because while I've done my own analysis I'm not here to predict where this will settle out. We still have lots of drilling and lots of results beyond the 43-101. With the North and South sections to add in the coming years, and additional depth to drill up in the main section, Kiaka could easily see 4M ozs of low-cost open-pits with only one processing plant required. Still going to need to fund it, but that is another challenge for another year.
Even if Kiaka is only 2M ozs, at cash costs of 500 and gold at 850 (which is what most use for economic feasibility studies), that is still 700M in pre-tax earnings. If gold does rise to 2000 and feasibility is based on 1500 and cash costs of 1000, that is 1B. Not a bad ROI for what it cost to buy Kiaka.
eebler