Some good posts Hi all,
I read some very decent contributions on this board the last few days. Congrats to all who've chipped in their views and opinions.
Sure, it's always strange to see a big sell-off on what otherwise should have been positive news being released by a company. But hey, we're on the venture exchange here, this sorta thing happens many times, across the entire board mind you.
Doesn't always mean there is something wrong. In Orko's case, I suppose common logic went out the window when the updated resource estimate was released.
Some people forget to make rational decisions and base their thoughts on what they see on the surface and often forget to look deeper, read between the lines and fail to look at the bigger picture.
They follow the herd mentality and like most also click the sell button and are in a way selling their shares for peanuts.
So, I do think this sell-off was based mainly on :
1. Alot of people who just look at the numbers and fail to realize the bigger picture. In this case the total indicated which went down from 124Moz to 110Moz
Reason : The use of a Whittle Pit™ as opposed to a reference elevation has allowed the model to include significantly MORE metal (from 49Moz to 110Moz) in the Pit model and subsequently reduced (from 76Moz to 0.3Moz) the amount of material available for the underground model.
So basically, most of all the ounces in indicated went to the open pit mining method as opposed to the underground mining method.
So yes, we lost 14Moz in the indicated category but we gained more certainty of La Preciosa being mined with an open pit method. That last point being the crux of the matter here...OPEN SUPER PIT being the preferred method of mining.
So, why is this so important? Ask any big mining company which method they prefer to use to get their gold or silver out of the ground.
Chances are high that most of every answer you will hear will be 'OPEN PIT'!
Why? An open pit mine is safer, it's much cheaper and much more easier to operate. An open pit mine requires less manpower and less equipment as does any other method of mining. There is much easier access for trucks and they can carry more loads of ore.
In the end, a much higher percentage of ore can be processed by open pit mining than any other mining method. These advantages all lead to an open pit being more profitable sooner than any other mine. And profits is what ticks most ceo's....and consequently the shareholders.
So ask yourself this. If you are a CEO of a big mining company who has the option of two possible targets for a takeover, one which can be mined with an underground mining method and one with an open pit mining method. Which would you pick?
2. Alot of people (mostly short term holders) who got in Orko in late July or early August this year selling on the release to secure their profits. So I doubt many of these even bothered to look at the release, they were more interested in their short term profits and saw a perfect opportunity to offload their shares.
3. Triple witching
So, then it all boils down to the final question for us long term shareholders. Did we hear or see any reason as to why we would join in this short term sell-off?
I THINK NOT!
To each their own methods of playing the stock market. Congrats on all short term holders who caught the run from the low 1.00's to 1.90's and securing some profits. And also congrats to the long term holders who are still holding and waiting to see some decent returns on their investment.
YeOld.