Duluth Metals Ltd DULMF

RE:RE:RE:RE:Why DM should be looking real good to Anto!

[rationalinvest]

Yoda thanks.

I think everyone will agree that management has been way too arrogant in thinking $2 was too low to issue equity, even buying back some shares. I also think issuing convertibles is a no go for a company at this development stage. They were basically betting on a higher share price to raise the funds needed. Or they maybe thought that Anto's $130MM would cut the deal? Now the market brought the stock down to its knees.

However what's done, unfortunately is done. Management now seems to have listened to the markets' teachings and cut all discretionary spending for the time being. Trust only comes by foot so this will not be turned around overnight. But the correct steps are now being taken.

And there was really no other way than to issue equity here, or the pressure would now be even greater. They made a mistake waiting to long and waiting even longer would be worse.

DM at this point has basically become a feeder fund for TMM. I take some comfort in that Andres Morel (CEO of TMM), former GM of Anto's El Tesoro, is running the show and as a DM shareholder, I'm in effect investing in TMM. Yes I would prefer to invest in TMM with Anto a 40% (+5% or so through DM) shareholder, but this is the situation we're given.

Now it's waiting for the market to return its love. Well at some point DM's TMM stake (no point in valueing DMM Exploration at other than zero) is just so cheap that the market will return its love, even if Cookie Monster would be running the 'Monster deposit'. I think we're now pretty darn close to that point.

The market only trusts proven economics at this point. And good or bad, TMM will deliver all the economics it needs in just a couple of months. So with DM now a feeder fund and the economics in hand shortly, the ship should be able to turn around. I'm betting big that it will turn around in a big way.