Just refreshing a great post here….Courtesy of DanWarren. Thanks Dan for the comprehensive and insightful post. Long on, and accumulating, NFG.
"Hmmmmm........ $200 to $400 USD per ounce in the ground, given the overwhelmingly favorable location of Queensway, and added in the prospects of finding more gold.
The location in a temperate climate, the drilled areas within eyesight of the Trans Canadian Highway, power lines going across Queensway, labor force available in 10,000 population town of Gander, with its international Airport which served as a landing point for so many jets called to land during 9/11.
And the favorable jurisdiction of Newfoundland, which, like Appalachia, needs jobs, wants jobs, wants five new mines operating by 2030, and the prospect of Leftist lunatic girly man, Trudeau, being swept out of office soon, replaced by grounded leader of eminent common sense, Polievierre, is ALL very, very favorable.
But, although I've not made more than cursory observations on this, recent buy outs of small outfits like Marathon, with its Valentine Lake deposit, and recent O3 outfit, the shareholders felt they were robbed. Not much premium over their share prices. I think 03 was only a 50% premium over the existing share price, which had gone down dramatically in the previous years. So, shareholders, just like with Marathon, were lucky if they even broke even....probably many lost plenty.
I think for us to expect some huge premium takeover or buy in is unrealistic. I think the majors and other lower level producers are hesitant on paying anything other than cheap prices for deposits/ prospective projects.
And, as I've been saying for a long time, the best way forward is to make plans to get into production ASAP.
NFG, I think it's realistic to say, dropped the ball, in allowing the highly ramped up Short Attack campaign, which increased in size by three times since the beginning of summer, to massacre the stock price, with no push back from the company.
I've noticed that other, far, far smaller exploration outfits make clear what their plans are going forward. But, NFG just keeps their plans for going forward, secret.
If they are being silent in order to keep flexible for the desires of some one or two Big Gold outfits, I think that is a huge mistake.
I've said before that NFG has been in the Catbird's Seat (preeminent negotiating position) for negotiating some level of participation with mining firms that desire to get a piece of the action of NFG. However, allowing the share price to get slaughtered over this summer, fall, and into tax loss selling season has taken a big bite out of their Catbird Seat position.
I still think the by far best way to go forward is to get into production ASAP, on a small scale immediately, as is available with the memorandum of understanding (MOU) with Maritime Resources (MAE).
Evidently, someone in NFG magt thought this was a good idea, because NFG invested a few million dollars in MAE about 1 and 1/2 years ago to create the MOU with MAE.
The poster, Nozzpack, has posted on this subject extensively. I assume he owns shares in MAE, as do I. And I bought shares in MAE after NFG announced the MOU, because it seemed to make such logical sense to go this route to very fast production.
I think Denis Laviolette had stated that getting into production could be quite fast, maybe a year to year and a half, utilizing the MOU.
As Nozzpack has pointed out in posts, the most effective way to increase share prices of an exploration firm is to get into production.
So, why wait?
Maritime has a viable mill they are refurbishing. I don't think there is anything substandard about this facility. It is right on the ocean with a deep Water pier, so ore can be barged to this mill.
Maritime has big backers, including Erich Sprott, but most notably, Dundee Corporation, run by a Big name in Canadian mining, and known for their due diligence in making investments. So, MAE is no slouch organization. They seem to be very capable of 'bootstrapping' their operations.
In the long run, I believe that NFG shareholders prospects will overwhelmingly be, by far, best served by NFG remaining independent, and developing Queensway independently. IF they allow a partner in to help develop QW, I think they need to strictly limit said partner's participation to the smallest level of ownership possible. This may be a difficult goal to achieve, if some Big Gold firm wants to push their way in to control of QW.
Erich Sprott has made it clear he thinks there is great potential for discovering expanded deposits on QW. If this is the case, then the maximum long term appreciation in the shares of NFG is accomplished by remaining independent, and keeping as much % of ownership of QW in the hands of NFG shareholders, and limiting any buy ins to the smallest % possible.
With the recent big drop in the share price, this goal has been compromised.
Thus, my view, and, of course, I am only a shareholder, with no inside perspective, is that NFG needs to bootstrap their company, to get into production ASAP, most likely by utilizing the MOU with MAE, to keep costs as minimal as possible.
Starting production ASAP could be the way forward to developing the huge QW project thru self funding for the most part, and would likely create an ongoing uptrend in the share price, which would put NFG squarely back into its Catbird Seat position, much stronger than at present.
Cash flow from mining would open up the availability of getting loans to build their own mill on site at QW.
These are my thoughts, as a shareholder, with no insight that would come from being close to the decision making position. So, I may be missing things.
But, the fall in the share price since this summer has been a very significant set back for NFG, I think. It can be temporary, but, it simply is not good for the negotiating power of NFG, at present.
Dilution is a simple fact for exploration outfits. The lower the shareprice you have, the worse it is for the dilution factor.
To allow the Short position to ramp up and cause damage to the stock has been a factor ignored, and this has been a big mistake.
Now, NFG has to make up lost ground, lost momentum."