Post by
AlwaysLong683 on Sep 14, 2021 4:13pm
Share Price Drops
I think the share price drops of Newfoundland junior gold exploration-stage companies in recent months may have to do with one or more of the following factors (depending on the company):
1) Market cap growing too high too fast given the few (if any) assay results produced to date by a company to justify such market caps. Perhaps you could call it the "NFG Effect", i.e., "Hey, NFG is in Central Newfoundland, we're in Central Newfoundland, so it's just a matter of time before we hit outstanding cores too!" Perhaps investors are becoming more skeptical about the quality of cores these companies will actually pull on their claims.
2) The flood of cores sent to labs from a now growing number of Newfoundland exploration companies, seemingly without a corresponding increase in lab capacity in Newfoulandland to meet the demand. Or perhaps companies are getting assay results back alright, but not releasing them to the investing public because they are unimpressive...?.....don't know the legalities of this, but if companies are allowed to withhold assay results that are disappointing, they may in fact be taking advantage of it to keep such results under wraps.
3) The lack of assay results that exceed investor expectations for a given company. Rightly or wrongly, if a company slows down the frequency of assay results press releases and/or investors see assay results that don't jive with what they expect, even if it's unjustified, I think the share price will drop (all other things being equal) as I believe these factors are what early-stage junior explorers rely on most to boost their share price in addition to pure speculation that the company's claims have great "potential" to hit it big.
4) Questions about whether a given project is minable (yes, I'm referrring to SIC's Moosehead property here - the apparent need for barge drilling and past instances where drilling has stopped for a period of time makes one wonder whether the terrain or other factors would be prohibitive in building a low-cost mine profitable enough to entice a company to want to proceed with such a project). Perhaps this is also the reason why SIC teamed up with BEX to jointly acquire additional projects instead of just sticking with Moosehead and Fleur-de-Lys....?
Other comments:
I seem to recall reading past posts on this BB stating that NFG had the advantage of shipping its cores to other lab(s), thus obtaining assay results much quicker than other companies on the island. Was this true, and if so, is this still the case?
Interesting to note that the only Newfoundland gold company I track that has actually performed very well recently is MOZ, which also happens to be the only company I know of in Central Newfoundland that has actually done a Feasibility Study for their project (Valentine) which was encouraging from the company's point of view (and seemingly the market's as well). They are also moving forward on other fronts (Environmental Assessment, detailed engineering work, etc.). Since MOZ is much further along in moving toward the possibility of actually building a mine, perhaps investors like the fact they are ahead of others in this long process.....?
Comment by
Global1966 on Sep 14, 2021 4:28pm
Fear, greed, rational behaviour, irrational behaviour, profit taking, impatience, patience etc....... all go to make up a market and prices. This is a down period for markets, especially US markets. It will get worse for the next couple of weeks. But the gold in Queensway isn't going to decrease
Comment by
Royal10 on Sep 14, 2021 4:36pm
You may be right Alwayslon683. If so, you mean that Eric Sprott, and other big shareholders, are throwing their money by the windows by paying as high as $12.97 per share to invest in NFG! Difficult to beleive...! Anyway, answer to all these questions should be discussed on FRIDAY, Sept. 17th at the ANNUAL MEETING! AlwaysLong683 AlwaysLong683 -