RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Resource estimate?No doubt many of us would like to see a compliant resource documented at Copper Belle and a great deal more exploration, either along the red line or in line with the KSM discoveries/tunnel route. It is clearly difficult to put a valuation on Tudor stock without knowing how much it will get from Seabridge for access to the tunnel route or a firm number on how much gold is sitting in CB.
However, I did note that when Seabridge explored Iron Cap in 2010, they were able to define a resource with fewer holes over a wider area than Tudor has drilled at CB. This is interesting to me and indicates that either the rules have changed in some way, or the north side of Copper Belle might need to stand on its own since the average hole came in at about 109% of Iron Cap's 2010 holes, while the south side of Copper Belle came in much lower. Other explanations are also possible.
The tunnel discussion related to CB would be moot if a large resource is defined. No tunnel needed, just build a road. But if gold exists at any point in the tunnel route that is close to surface and economic, there would need to be compensation for both the access and the gold. If the tunnel route is not fully explored before the tunnel is built, there could be a surprise that none of the owners would like to see.
For that reason and others, I think the eventual developer of KSM will want to cover all possibilities that could occur along the tunnel route and would want to establish full control with no overhangs or risks. KSM is a big, hairy project as it is and doesn't need a lot of questions related to T/C. Full control in my mind means full ownership of T/C by the developer with no other encumbrances including NSR's to complicate the project.
Getting full ownership will cost more, but my bet on the KSM and T/C stock is based on the potential that the developer will consider the extra up-front cost to be worthwhile. My investments are based primarily on the value of T/C on those terms, along with the minerals that Seabridge has already found and documented. On that basis all of those stocks are undervalued by some degree. In fact the T/C owner stock prices are essentially call options on the future existence of the companies in any form. So, as with options, the dime per share I spend on Teuton, the 20 cents I spend on Tudor and the 3 cents I spend on American Creek is all at risk, but with no expiration date that I can determine, which is an attractive option scenario.
As with many similar exploration stocks, there is a cycle that can be traded as well. During the exploration season, interim reports and anticipation of what might happen tends to raise the stock prices and offers a chance to lighten up. After the results are in, if there's no major news, the stocks settle back and offer better prices at which to buy for the next go-around.
Over time, with some good luck and discipline, the average cost might be brought down, the biggest downside being dilution. Seabridge and Teuton have done a good job for the most part in keeping stockholder positions stable. Tudor and American Creek not so much, so I have a bias in terms of my position sizes based on that. That said, I see the value of T/C access as a tunnel route to be exceeding the current stock prices of the T/C owners, and I see the dollar value of KSM minerals to be worth much more per share than the current price of SA. Anything above that in terms of valuation is icing.
The speculative nature of these investments means that the math is cold and hard. The total investments are at risk and no one should be trading these stocks using the rent money. But with the higher risk comes possible higher reward as I saw last year with Metallis (for me a 7-bagger) and Garibaldi (a massive return that I completely missed out on). Aside from all other considerations, that's just fun stuff to play with and the odds are a bit better than Power Ball. Most of the folks on this board I find to be understanding of the risk, so for the most part we just keep having fun with it and invest the rent money in other places.