GREY:DULMF - Post by User
Post by
materialsgirlon Sep 04, 2014 1:22pm
176 Views
Post# 22906230
DM specifically
DM specificallyrocdic;
My comments were specific about this company with the specific assets and specific amount of cash and specific debt etc. I made no inference about any other company at all.
If you asked me in general, which you did not, I would venture to say that at least 19 out of 20 companies on the TSX Venture that are 8+ years away from production will produce big losses for new shareholders now. It has always been this way.
If a company has a good asset such as 2 grams a ton for open pit gold or 0.8% copper grade located near infrastructure and there are no smiling salmon in the area we can reasonably predict that a mine will go ahead. But the success for management and the employees is usually done on the backs of investors.
Even successes such as Copper Mountain which began mining 3 or 4 years ago and it has fixed all the "issues" is still showing a share price 50% below its 2010 peak. For each success like Copper Mountain there are dozens that are still fumbling with share prices down 80% to 95%. This is the reality. Others succeed in starting production and then promptly falter. There are numerous ones in Brazil (CPN JAG etc etc) and here we had Labrador Iron Mines and Donner Metals and some more. Luna Gold is still alive in Brazil after a rescue but where it goes nobody knows
Most early stage companies will have numerous dilutive share issues and often one or two consolidations to keep the share count from going into the billions.
DM is a really bad place to be for reasons I have outlined. But it is not alone.
The good news for wise investors is that many people cling to a dream that everything will turn out to be alright. This can prop up the price way above what it is worth for weeks or months. DM traded over 50 cents after the bad news was out. This "denial" factor in the market gives investors a chance to get out at a great price. Right now 25 cents is a great price fto get out of DM .
It is up to each person to evaluate and decide.
mat