Our conviction is being tested In spite of (in my opinion) strong drill results in the Yukon recently, managements efforts to step up its efforts to tell Sitka's story abroad and plenty of news (both in th near and not too distant future) with drill results, as well as updated resource in Arizona (what I personally am really looking forward to). Toss in, depending on your view) high belief in gold/silver prices exploding down the road, we watch Sitka's share price drop.
We sit here watching gold/silver prices getting slammed (I personally have a cynical belief why), the downward selling pressure by a handful of players (during tax loss season), throw in Christmas season and some needing a few extra dollars, our conviction is being tested.
What do we do now? Some of us have done our homework, have formed an opinion of where this company's share price should be right now AND where we expect it to be in the future. Depending on what conclusions are reached and cash reserves, this could be considered a buying opportunity. My best guess is that we will probably be stuck in a bit of a channel (outside forces excluded) for another 2-3 weeks when tax loss selling typically ends. The big question for me, how much of this price drop is real and how much is weak hands being shaken out? Also, when and how much of a recovery do I expect short term and a little further down the road?
A conclusion that I have come up with is this, if we are a producer, the lower of gold/silver comes right off the bottom line, so the share price should go down short term (as it is real time lost revenue).
Sitka however is a gold/silver (as well as other metals like copper and zinc) explorer. While we would like to see higher prices right now, ultimately the prices will only matter long term when we sell (though higher prices will help during financing's). Everyone needs to form an opinion of where the price of gold/silver will be in two or three years when hopefully we will be ready to sell some or all of our assets. We also need to measure our expectations of the price of Sitka along the way vs. how long we are prepared to stay with it......maybe have some shorter term expectations will result in some "harvesting" along the way, as the price hopefully goes up.
I believe it was David Morgan that said something to the effect of during a bull run, it will try to buck you off on the way up. Now is the time for people to do their homework, maybe contact the company. Now is the time to form an opinion on where we are vs. where we are going. Do these prices make sense or not? Is there opportunity or not? If so, what are my expectations (timeline) for price movements and what should propel the price up (besides gold/silver prices)? What is your personal risk/reward numbers and can you live with it?
It is my belief that we should all have some sort of an opinion on each investment we make, otherwise we are just gambling. I personally have put a lot of time, effort and money into Sitka because I believe in management, their assets, their ability to prove their assets and how it lines up with my opinion of the macro environment in relation to gold and silver prices down the road. This does not make me right! I do however have a strong conviction to this story. Time will tell if I am right or not. I hope everyone does their own DD and comes up with their own opinions to help with their resolve (if you chose to stay with Sitka).
I wish you well on what ever conclusion that you come up with.
Best wishes