A few things to point outFirstoff, this is one of many very undervalued junior gold plays on the TSX Venture. There has been a large disconnect between the price of gold and the price of the gold juniors. I use a ratio called "Daves Ratio" as follows:
Daves Ratio = (TSX Venture Index/Price of Gold).
In 2007, the TSX venture index was 4400 and the price of gold was $650.00 giving us a Daves ratio of (4400/650) = 6.8
By the time the great meltdown of 2008 occured, the venture index had plumetted to 650 and the spot price of gold was around $750.00, giving us a Daves ratio of (650/750) = 0.85..... This was the the first time that this ratio was under 1, and for those with the cahoonas to buy, there were many 10 baggers to be had. Thankkfully I had the nerve and made a small fortune. (My top picks at the time were T.KGN at 0.60, V.EVG at 0.13, T.VTR at 0.15 and T.CSI at 0.60)
Well folks, its unbelievable, but this ratio is now again below 1 again as Daves ratio is (1760/1850) = 0.95
So, in effect, the bells are ringing and this is the time to buy junior golds - but you have to be very careful and use strict criteria when choosing your plays... I am only buying quality compnaies that have the goods and that are cheap. I am choosing not to speculate so I am not buying any companies that are just starting to drill, regardless of how juicy thier prospects are. I am also just choosing companies that have cash, so that they dont have to go back to the market during these trying times. Most importantly if they are approached by interested funds, then the funds have to go into the market.
I love ATG since they have just over 1 million oz of gold and we are paying less than $20 per in situ ounce which is ridiculous. 5 years ago when gold was around $5-600 per ounce, we used a $100 per in situ ounce as a yardstick. Now that gold is 3 times higher this should be bumped up to at least a $200 per in situ oz evaluation... Nobody on the planet can find gold for $17 per ounce, so its now much cheaper for other explorers and producers to buy shares in companies such as ATG than it is to use thier precious cash and look for the stuff... If these low prices remain, then companies such as ATG will go into play, even if they have good posion pill provisions intact.
I wlll comment on a few things as follows:
The recent financing: I know for a fact that this financing was oversold the day that it was announced. I tried to get some paper but not a chance. I had a pal who was allotted 600,000 units, and he was subsequentially cut back to just 200,000 units - this was probably because the chairman decided to buy so many units (James gray bought 3 million untis) So for those of you who were wondering if the last tranche would sell - it was a mute point. I also know that this "pal" of mine is a big player and he will buy all day long at 0.09.... So will I!!
Increase in short position - this is suprising in that there is huge risk involved shorting a stock like this that is so undervalued. So - whoever it was probably was in the know and realized that the recent buying binge would soon end. Secondly, I would wager that whoever shorted over a million sheets probably participated in the financing - this way the shorter was "covered" so to speak and with so many shares out there, it is highly unlikely that there would be a call for him/her to cover the short. Granted any paper obtained in the financing is not free trading for 4 months, but I sitll think that the chance of a short call is slim... It would be great to see that this short has been covered.
I also know that his company is in no way promotional, they juyst let the results speak for themselves.
Recent drill program - Often no news is bad news, since if the results are just mediocre, then the company is not obliged to report them. If however there are good results - it is illegal to hold material results back. Lets just hope that they are late becasue of a back-up with the labs or that they are being re-assayed as has been speculated bu others.. Regardless, they fact that there is already over 1 mil oz is good enough for me.
This is one of those deals where you wont regret buying any shares and you will wish that you had purchased more.
Good luck to all longs - dont let the penny flippers and doomsdayeers and market makers shake you out of your position.... This deal has been flushed out quite well and any news should drive the price up significantly...
Jandd