Post by
danale on Oct 17, 2023 11:20am
Some Thoughts
I still like this play, as IMHO it offers a lot of upside potential in next few months.
I fully expect the action to pick up after the closure and tree cutting permits are in place.
The price of palladium is the main reason the stock has tanked. However, I would not write palladium off just yet, as it seems like Hybrids are selling much better than EVs and will do for a number of years to come. Also, the supply issues are here to stay. If GENM can nail financing, then the SP will definitely jump and we will all be happy.
But, what if they are unable to secure financing, then what?
A fully approved project with all the permits in place is still valuable.
Remember that this project has tons of potential upside for copper.
If a larger player were to buy out GENM, they could easily finance the start of the project and then start drilling for extra tonnage. If you start drilling now, then you would need to potentially redo all the studies and approvals, which is probably why GENM stopped drilling until the project is commenced.
Also, consider Sibanye. They own about 20% of the company, or approx. $12M based on current $60M valuation. If they were to step to the plate and lend GENM $150M, the sp would likely jump at least fivefold and Sibanye's $12M would be worth $60 or a lot more. Seems like a no brainer. Or they could buy GENM outright.
My main point here is that the value of GENM sp will go up regardless of their ability to secure financing, as they have a valuable, fully approved project with great potential for additional copper deposits that will be pursued after the commencement of the project either by GENM or anyone else who will take them out. Jamie and Ketty will try to get the financial done, but if they are not successfull, they will still be able to get a good value for the company and so will patient investors.
They might have to let it go for a much lower price than what they would like, but the sp price will still be significantly higher than it is today.