Post by
68Charger1 on Aug 25, 2023 8:55pm
A deluge of news distorts tradition in investors’ favour?
Creating shareholder wealth through resource exploration is a tough game. Your management, property, share structure and financing must all be strong just to get to the starting line. But might the real catalyst to extremely rapid share price appreciation be found in lab turnaround time?
In an earlier post I discussed how those fast results likely help FDR’s drillers better target the gold and save costs. Looks like that is working out well. But the junior resource market and its share-pricing conventions may be wholly unprepared for labs as fast as this Suriname operation. If you reduce the maddening turnaround times dramatically enough, an exploration story becomes less like a picture book and more like a movie. And people love movies.
Ordinarily, active traders probably adhere to some theory of capital deployment such that a stock whose price is no longer moving rapidly ought to be immediately sold in favour of a more active issue. To their minds, I suspect, FOMO is their friend. It helps reduce opportunity cost. Always time to reverse course and get back into the same stock if needed, right?
(Why should we more patient FDR owners care about short term fluctuations? Because they can vitally affect both financings and buyout offers. If the hot money gets restless in either direction, it will definitely push our stock price around.)
Now… who knows where the cut-off lies for typical traders’ patience? 6 trading days? 4? 2?
Compare that to what FDR is attempting to achieve, perhaps unparalleled in the history of drill results communication. Our team has already shown it can put out 3 releases in a 4-week timespan. With just one drill. The second drill should start up around the end of August. At what point do traders fear to *ever* be out of FDR? If big step-out news might never be more than 3 or 4 days away?
Great Bear certainly put out results regularly once they got multiple drills turning. Eventually, in 2020, with four and then five drills in action, results came every 2-3 weeks. But in the early days, news seemed to take forever. The stock jumped to $2 after its first big strike in August 2018, and climbed above $4 within 6 months. Frustratingly, GBR then drifted nearly all the way back down to $2 by May 2019 before the big step-out hits came and drove it above $8 by the end of 2019.
If the usual short-term traders are as drawn to FDR as they are to any fast-moving stock, but then fear to sell it, what do we get? An even smaller float and some (unwitting) new long-term “patient” money. FOMO commandeered and fully enlisted in our cause. And a truly hyperbolic share price move, on its way to properly reflecting the potential of FDR’s property.
Fun times. Strap on your helmets, everyone.