RE:RE:RE:Two HatsHey, we’re just having fun here. Good analysis. We all know that EAG is a speculative play. I do think that it will be dead money for quite a while.
The positive is the results which are really good. People are looking at EAG as a potential company with over 1 million measured and indicated resource. The psychological step of 1 million is crucial for a lot of investors since there is not that many mine with 1 million and up proven reserve over the world. We’ll see next year what will happen.
Even though, the results are really good so far, the company is perceived as a paper issuer. At ½ billion share issue, where will it stop, is the question ?
Not much interest in these type of stock by investors. The overall sector is neglected even for mid to big producer. So we can imagine that exploration stock on the venture get no respect. The price of gold drop 30% from its high. So with a commodity with no upside trend for now will not attract investors. For the last 180 years, the gold sector got negative returns 3 years in a row only 3 times. Are we going to get a fourth negative return this year, which will be a first ? I don’t know. Looks like we may navigate in a positive territory for the overall sector in general this year.
There is more interest in more liquid stock like the FNV, G, K, NGD, etc. than a micro-cap exploration stock like EAG.
The step from an exploration company to a producing company takes time and lots of money. As an example, Stornoway Diamonds amass 1 billion for its diamond mine. So I cannot imagine how long and how much money will need to get raised for EAG in the future if the results are stellar.
So, let’s cross our fingers and wait. The geologist probably knows things we don’t. That may explain the effort and perseverance of management. Like I said, dead money for now but depending on the results, could be a ten bagger in 2-3 years down the road.
GLTA