RE:RE:So SnidelySnidely wrote: No doubt. I am clearly optimistic - I wouldn't have written the Reddit piece if I wasn't. But we need to keep in mind that this is a multi-year long play. Knowing who is running the show and who is advising them - I really don't think they are looking to turn this quickly for a nice payday. Sprott was Chairman of KL when they acquired Fosterville through Newmarket. He knows how underpriced it was when it was acquired by KL and now he is advising the group sitting on the Newmarket side of the equation.
As I talked about at length on CEO, Newmarket made a big mistake by selling as early as they did to KL. They sold it for about $1B, so it is hard to say that they were losers in the deal, but there is no question that they sold the property for far far less than it was worth. If Newmarket had the working capital and patience, they could have really explored the Swan Zone and other zones associated with it, and probably have commanded a price tag that was 3-5x what they got from KL.
I pretty damn sure that is exactly what Sprott is advising to the NFG Board and Mgmt. They have got such fantastic drill hits so far, that raising capital has been a breeze. Sprott is probably saying, "Hell, if no one else will give you the money to finish the exploration, I will personally fund it!"
This project is as amazing as everyone suggests - but it is still in its infancy and it is going to take considerable time proving up its value to the level that the Board and Mgmt want to sell for. There will be plenty of entry and exit ramps as this will have pretty sizable ups and downs based on the current trend of the gold market and impulsivity and lack of patience from investors.
Based on my background and experience, I am much stronger on the business and mining side of the equation vs. investing and trading. But my sense is that there are two plays with NFG. First you can do a "Ron Popeil Investment Special" - "Set It and Forget It!" for about 10 years. That is primarily what I doing because I feel that even with the ups and downs, this goes 3x-5x over that 10 years. That is a good return for a low maintenance investment.
The other play is to try to ride the ups and downs - timing when exuberance from a single drill hole or sample brings it above trend, or when the impatience of investors on a lack of recent news drops it into undervalued zones. If that is your jam, I wouldn't be surprised if you could come in and out of this play a half dozen times as it plays out and make even greater returns.
Either strategy makes sense to me. But this isn't crashing to a $1 and it is not going 20x in the next 24 months either. That is my honest common sense approach. Granted I could be wrong and a major who is desparate to make a big move comes in makes a ridiculous offer. I feel like Kinross is one of those that is in real need to make waves to keep up with all the other players among the majors - especially now that KL has jumped them. They are in a rut and might be willing to throw a hail mary... Agnico Eagle may also be someone who is looking to make major waves in an attempt to keep up with the Barricks, Newmonts, BHPs and Freeports of the world. They might be crazy enough to offer a merger with NFG at 3x over current share price. While possible, think it would be very unlikely.
Very, very unlikely.