Post by
Countrygent on Oct 30, 2021 1:32pm
Predictions are Risky
Amigoes, if you have been living on franks and beans in the Trailer Park for the better part of two decades like me, you'll readily agree that predicting the next act of the circus in Mongolia is always a risky exercise.
However:
1. For the first time since the early 2000's when Enkhbayar invited RF to come in and spend big money exploring OT, the MPP have consolidated their political power.
2. Copper and gold prices are way above the assumptions used in all prior feasibility and economic projections for OT Lift 1. There is every reason to move fast to get as much production as possible while copper remains tight and inflationary pressures support gold.
3. The crystal ball in UB says the government believes they are close, but must appear to have struggled mightily and improved the Mongolian 'deal'.
4. Yours truly has some measure of admiration for the pricing skills of the gang at SSL - they run their book not unlike Warren and Charlie proceeded at Berkshire Hathaway, with a lot of smoke out of clacking calculators and pencil shavings flying because they take a data and disciplined valuation approach to what they do. Many might dismiss Nolan's comments over the years as pumping his own book of business, but they have been very telling if you listened carefully. There is much more gold there than most people understand. This may be the greatest mining deal ever done.
5. Following up on that and the number one fear of ETG minority public shareholders (we got the ore in the ground, we got the market and economic conditions), we get the heebie jeebies about how the ETG non-IA status will be resolved. What cost if any? Well, the best-placed outside shareholders at SSL sent a big signal the last few weeks as they squeezed as many free shares out of the float as they possibly could. Price and timing were more than suitable. Better than any streaming deal available for their Treasury to the extent of a few million bucks.
6. This last drift-down on low volume in a special situation which has been basically abandoned by the broader market after the absolutely terrible marketing by Mongolia coming from Windfall Tax, South Gobi Implosion, Khan Resources extortion, Hotel Mongolia hostages, Dubai Backstabbing ... has made the market shun a deep-discounted share in what will be one of the top-ten copper/gold mines in the world, and probably top three in net all-in sustaining copper cost.
What a chance to get on the train at a crazy low price here. How I wish I had not committed so early and maybe been a Teslamaniac last year, with a big pile of cash to slide over right now.
Oh yeah, I'm high on the fermented yak milk right now.
Magic 8 Ball says "Looking Good".
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Comment by
UNKLAL on Oct 31, 2021 11:45am
My senses tell me that my wife n I won't be eating weiners n beans in our retiring years, mainly because we have shifted the bulk of our TRQ to ETG shares. A lot bigger returns coming from ETG in the future than TRQ as you pointed out a few posts back!!! JMO UNKLAL