RE:Past winners and loosersThe Achilles heel of Pd miners is that palladium & platiinum have a 1:1 substitution ratio for catalytic converters. The current average savings per car switching from Pd to Pt for the converter is $142. That is the kind of money that brings tears of joy to auto manufacturing executives. So how long will Pd be above $2000 oz & how far will it fall when it does? Investors think about such things. We have an awesome share price for investors, a lousy price for speculators, & a hohum price for traders. Think about how small a segment of society that actually invests in junior Canadian miners.
Pd is over priced because of the deficit. Pt is in surplus. That means auto makers are/will be switching to Pt where they can secure more Pt. Since the two metals are equally exchangeable, if we take the two prices & average we get around $1800 oz, very near the number projected by financiers in Generation's FS. That big of a drop some time in the near future makes people pause before investing in Pd, especially when nickel & copper will be increasing in demand & price. Why should i invest in a commodity expected to drop when i can invest in one expected to increase?
The people who do invest in junior mining are constantly searching for their next investment, its not like Generation suffers from lack of exposure to those who would be willing to buy. The problem is, people look at Genm & decide to pass. Results however trump doubt when the results are good. We benefitted from speculators & traders with the run up to the SBSW decision, & most of them were betting Yes. No means they all left en masse. That leaves investors. Is this a good investment now? It is for me. I came in as a trader 2 years ago but i saw enough to become an investor. There is more derisking to be done. No environmental permit is a slam dunk. I am not an investor to be fretting over the daily price, i am here for the results of a producing mine or a very juicy buyout. I dont know what the price will be this week or this quarter. But i am betting that a mine that produces 146,000 oz of Pd a year is highly profitable. When that comes, we wont be less than $4. If we dont make it there because of a buyout, I am confident our team wont get played for a buyout that is generous to the buyer & lousy for the seller, us.
There is nothing wrong with being a trader or speculator versus an investor, earn money anyway you can in this game. If it were easy or formulaic, everyone would quit their dirty or dangerous day job to sit at home & play "junior Canadian miner", the game that always pays a profit. It doesnt, it is hard. When we get news of a streaming deal with upfront cash, i expect traders to pile back in. But they wont stay long, they are here & gone to make money, not be part of a story. Investors are waiting for the big payday, not the runs that come & go. I sold 45% of my position between $0.905-0.995 because i bet that a No decision was coming. That was speculation. I have bought back in between $0.65-.71 because that price is a pure gift. Not everyone sees it that way. Not everyone bothers to look that a Pd miner is also a big time Cu miner. If this project stalls or is permanently delayed then i was wrong & i move on to others. But we are not lacking exposure to those who regularly invest in juniors. Now, if we could attract investors who don't normally invest in miners, that would change everything in the SP. I see that a few are predicting $3000-5000 Pd, maybe it hits that briefly. But i expect Pd to go the other way & drop below 2000 within a few years. And this project is still awesome at $1800 Pd.