Investing in resource companies - analogy to a poker game. Tocvan had another solid week, up again from the previous week closing at $0.65 on Friday, posting a new year-high at $0.70 on Thursday. The volume was light, trading only 217,000 shares for the entire week.
A walk-off Grand Slam Homerun in the bottom of the 10th in the first game of the World Series got my heart pumping. All I need now is news from Tocvan to get my blood flowing faster.
I look at the current progress of Tocvan as a card game. Think of it this way, it starts off with everyone around the table assessing their opponents, some are seasoned players and others perhaps their first time to the big game.
I have been sitting at the table with Tocvan for several years now, assessing the information provided in press releases and other forms of communication such as interviews by the CEO and reports by research groups.
I've learned much about the progress of Tocvan since the acquisition of Pilar and El Picacho. I suggest that anyone wanting to review their progress go to Tocvan's website at https://tocvan.com/, and in particular, their corporate presentation at https://tocvan.com/home/corporate-presentation/.
The development of a mine doesn't happen overnight, if you look at the history of mining, a company undergoes a series of stages, from exploration and discovery through to development and production.
We are playing what I would call the "Long Version of Texas Hold 'em".
Two cards, known as hole cards, are dealt face down to each player. Since every stock has to start somewhere, generally there isn't much information known by investors, perhaps only 2 cards worth. This is when a corporation is created, seed financing is sourced, and properties are reviewed and selected. This becomes a full public disclosure document filed with the Securities Commission.
To jump start the price and create investor interest, 3 more cards are dealt up for everyone to see.This is the exploration and discovery phase of a company, some of the facts are presented for everyone to see and a discussion of the company's merits begins, followed by speculation in the stock market.
From this limited set of cards, the bidding begins, much like buying and selling shares in the stock market. The value of a company, ultimately determined by its stock price, either increases or decreases as cards are released one-by-one. Frantic speculation often occurs with the release of each new positive press release. The value of the company is determined by a number of factors such as the size of the resource, the shares outstanding, history of management, and other parameters.
Here is where it gets interesting, the winner in poker is determined by a set of rules and full disclosure at the end by turning over all the cards for everyone to see. Whereas, the value of a stock is ultimately determined by the experience of the investor and the game never ends. If the mining company isn't successful, the price declines, and more often than not, there is a share consolidation allowing the company to raise more money to continue exploration.
The dealer in the stock market is the CEO of the company. It is his job, along with the Board, to make decisions in the best interests of shareholders.
This leads me back to Tocvan, we are at an advanced development phase nearing pre-production and finally production. Brodie has yet to deal another card (press release) since September 10th.
The analogy I can draw is we are taking a coffee break until the next card is turned over. Nothing has changed, thus all I can do is wait.
My dad was an excellent card player, he was surprisingly accurate in determining whether it was a bluff or not. His skill in determining a bluff only came with long practice and experience. He would often look into their eyes and take a long pause.