FDR: would a “near-ology” play help or hurt?I can’t be the only person looking at our property map and thinking, “those Upper Antino hits are great… too bad they are clustered so close to the edge of our land package.” Can FDR acquire any adjacent territory for a reasonable price? If so, should it pull the trigger?
My reasoning here relates to what happens often on major gold discoveries. The successful explorer already tied up all the ideal land, but some nimble imitators jump in and stake a ring around it. Penny stock speculators assume they’re further ahead buying the imitators than the now richly-priced original, and a near-ology play gets underway.
Believe it or not, it happened on Great Bear to some extent. Even though Chris Taylor had done his initial staking work so meticulously the Dixie deposit couldn’t have been more perfectly centered on GBR’s land if you were writing a novel.
By contrast, FDR has perhaps the perfect setup for a near-ology play. Who knows how long that 8-kilometer trend continues to the northwest?
As a matter of fact, my inquiries suggest that when FDR was asked about this very point, it turned out not only were adjacent lands available reasonably, but FDR was actually approached to gauge its interest. I wonder: did the sellers want cash or shares? No surprise if someone would seek to exchange jungle containing an unknown amount of gold for stock in a proven company like ours.
If we have not yet done such a deal, it may be for good reason. Whatever incremental advantage could come from a larger resource might not be worth the free publicity stemming from a full-blown near-ology play. Were such a play to develop.
Granted, the kind of investors excited about a cash-poor junior selling at $0.10 which *might* have a part of the Antino deposit are unlikely to put down $1.45 per share of FDR. Human nature, eh? Still, any extraneous hoopla all adds up to more attention and interest from those institutions who have not yet added us to their “must-own” lists.
On the other hand, if FDR really does want to expand its footprint, we’re in the driver’s seat – as usual. Like Buffett said, while weak companies confront management with one hard crisis after another, strong firms throw off endless happy dilemmas for their operators, with attendant easy choices.
FDR will be just fine without additional property, and indeed may want to avoid complications. Or, at the right price, such an acquisition might be just the sort of move to indicate astute management acting in shareholders interests. And Colin Padget can most assuredly get the right price if he so chooses.
Heads we win, tails the non-shareholders lose. Very nice. Keep in mind, anyone who wants to join our winning team can still buy in at under $1.50 per share.