RE: red again??! "What we need is some good news for once and for Anonymous to stop selling!!! Something has to turn this sinking ship around before it breaks $1 as it may not ever recover from that if it does."
In mid December 2011, NKL broke below $2.00 and traded as low as $1.70. On the macro side, platinum prices declined to $1400 and dipped below $1400 at the time. More recently, platinum prices have once again traded down to the $1400 level and recently broke below $1400. Coincidence? I do not think so. All other metals included aside, NKL is known as a platinum stock and at times, the stock price will reflect what is happening in the metals market. That said:
We have known for sometime that NKL has been supporting PCY's stock price. Guess what, the inverse is true as well. Put simply, investors have no visibility as to how PCY is going to pay off the $10M loan let alone obtain working capital amounts going forward with the EXCEPTION of selling shares in NKL into the open market (ie: once free trading at the first of the year). If that happens, the dynamics of the public float of shares traded in regards to NKL changes in that what is available in the open market gets bigger and bigger. As an example, 1 million shares of NKL sold by PCY into the open market is a lot of shares to digest and would serve as an overhang. Per a $10M loan that must be repaid, that's a lot of potential shares of NKL that can come to market and in so many words, some investors have been spooked to the sidelines. To date, PCY has not completed a PPA, arrived at revenues via Ulaan Ovoo and has yet to secure financing for the power plant. A lot can happen in regards to PCY and year end that resolves the issue of financing that takes shares of NKL out of the equation. Til then and provided something does take place, PCY's checking account is the shares of NKL that it holds. That said:
NKL has actually held up pretty good in recent months when compared to the PM sector as a whole. For me, that strongly suggests that NKL is viewed as a quality stock to have in one's portfolio in that it is one of the last ones to get sold in one's portfolio. With the PM sector showing signs of turning around and investors still licking their wounds from losses in a terrible PM sector, NKL has become victim of many wanting to raise cash and capital "at the same time" so as to chase opportunities elsewhere. Not because opinions have changed in regards to NKL longer term. Instead, because performance to date has been lack luster where there are many tempting bargains elsewhere. That said:
This sell off no doubt sucks and my comments only hit on a few of the variables at play. Despite this, Wellgreen remains a quality asset. With drill results expected every month and with some of those drills geared toward expanding the resource as opposed to infill turns, there are catalysts in place to generate a higher stock price. The two that have my attention is whether or not PCY obtains financing so as to take shares of NKL out of the equation and of course, platinum prices. Otherwise, and for those that actually have some cash and capital, what a bargain!