Continental Gold Limited New CGOOF

The real cause for concern at Continental

[DStein777]

It's been mentioned before 80% of Stock Price movements are explained by the change in the commodity price, so you're effectively leveraging the commodity price movement in either direction, by about 3x from what we saw yesterday with the fall of gold.

The negative Peace vote in Colombia won't affect the permitting for Continental, it's not good for Colombia or the perception of the Country and it shouldn't be a real issue for the improving security of the country or the overal economics.

The real issue is dilution as they've flagged here before, CNL expects this to be around 50/50 for the project finance and what this translates to is $200M US in equity coming into a company worth $365M US translating to a 35% dilution for shareholders in the coming 6 months.

I repeat, you're going to loose 35% of your equity to dilution as the next step in the company development, if everything goes to plan and they get their permit in the coming 6 months.

It's not a good trade, if anything, consider shorting by 20  - 25% for the next 6 months from any price level.

Not wanting to be negative, just stating the obvious.

I'm a fan of Roxgold these days and see the market giving a better multiple for a similar deposit on a NAV basis to Lundin's FDN since people believe in the management - CNL management is not the same pedigree and doesn't carry the track record that the will ease nerves in the market. Also have a look at White River going to list in London 10M oz at 10 g/t with an experienced and succesful team managing old Harmony Gold assets.