I had time to review the company documents and filings and I conclude that this company is undervalued which makes it curiously interesting. I list the pros and cons. You must decide if this investment will be good for you. Here are the pros and cons. If the cons have an* next to it it means it can be changed. There are many positives that will make you excited to want to buy, however I ask you to consider the cons carefully and to weigh the two before deciding to buy
Pros
-they have approximately 3.6 million low grade ounces in open pits.
-open pits are a lot less expensive to mine versus underground ounces
-these ounces are high for an open pit. Generally open pits have 50% less grade than Probe so this is a plus
-infrastructure meaning roads, electricity, railroads is excellent
-Val'Dor and Quebec is very mining friendly. Very positive for mine development.
-numerous senior gold mining, mid tier and junior mining companies are in the area giving confidence to it being a good area to be.
-Quebec has a favorable tax code, which is attractive the senior producing companies
-the gold has a high metallurgy meaning that the gold recovery on its ounces is high above 90%
-company is selling at about .25 times its net asset value compared to comparable companies selling at .75 times. Probe is selling at 3 times less than its peers. This is interesting good or bad depending on the reason for this valuation disconnect.
- company has no debt, clean balance sheet.
-company has approximately 33 million C$ in the bank. It has about .25c of cash per share or 17% of the market value. Essentially you are making an investment with a discount of 17%.
-company has an aggressive drill program of 90,000 meters. This drill program concluding in 3 months should bring confidence to its existing 3.6 million ounces and it should add on hopefully 400,000 additional ounces so that it's resource will be a meaningful 4, million ounces. Drill hole results should continue to be released over the next 3 to 4 months before the resource.
-volume has picked up which is important for an historically illiquid market in its shares
-company has a very large land parcel. The drilling to date has only used up a small percentage of the land giving further drilling opportunities well into the future
-Canada, and particularly the Quebec area is one of the most preferred areas to mine in the world: from a political and government friendly point of view.
-Compensation to its management is above average for its size and this could attract best of class talent.
-Precious metals are very much in favor for the next 12 to 18 months so Probe should benefit from being in the precious metals sector.3.2
-management has accomplished good growth in its ounces from 770K to about 3.6 million ounces in 4 years. Ounce growth over the four years has grown by 367% or about 90% per year.
Significant positives but I have cons too. Consider both and decide if the pros out weigh the cons or vice a versa.
Cons
-Name does not say Gold in it *
-If CEO is the main geologist what's he doing running the company? Let him be the geologist.*
-company website not shareholder friendly, colors boring and interface very uninviting*
-why has the company not attracted a senior mining company to take a strategic position? THIS COULD BE AN ALARM THAT THE PROJECT IS SUBPAR.
-news releases when you check on the effect on the stock is not impactful. Communication should be uplifting obviously people cannot translate the news releases as positive.*
-insiders have ownership mostly through options and very little in open market purchases. The sterile news releases complement the lack of insider buying.*
-management possibly distracted by their large investments in another gold company. I see two Probe members work for the other company.
-compensation for the ceo seems excessive for a junior gold mining company that generates no revenues. If ceo is the main geologist he is way too highly compensated. The saved compensation of a reduced salary can be used to get a real ceo for the company.*
-compensation for all members seem rich and the board compensation committee with an outside compensation expert should review task values to compensation.*
-many of the cons seem to be reflecting a lack of marketing. This can be corrected by a seasoned and savvy ceo.*
-the company valuation is compelling relative to its peers. Why is there such a disconnect between these valuations?
-the precious metals market are on a tear and it's unfortunate during the slow years that the company did not address the above. Evidence of a lack of leadership and marketing.
-company needs to list markers or future catalyst on their website or on their press releases. There is no place on the news releases or on the website to project or to foresee the potential of the company.*
-video clips of presentations or of the company project could help investors to feel the opportunity.
Conclusion
Management with the lack of leadership and marketing is in my opinion the cause for the lack of interest in the company. An active board would have noticed the companies inability to launch in the market place. It appears that the board and management is hoping for someone to buy them. Shareholders are at risk that if the board and or management don't make the needed changes then the company will be acquired at a non premium or little leaving shareholders holding an empty basket after risking their time and money. I bought 10000 shares just to see what evolves. Downside should be protected by their cash, continued drilling, expanded resource and the record breaking precious metals climb.