This announcement is fairly positive (even if it brings one or two questions already addressed by some posters), but the market’s reaction should not baffle anyone.
First, in a certain way, the holders and non-holders who observe the stock were expecting the environmental licenses to be emitted so, a confirmation of what was already expected does not move the stock.
Second, while new results from another tenement were really good, they were not validated by a commercial lab yet, and market disregards those results (the same happened in September 2016, for example).
Third, the absence of drilling results took some eventual interest from the table for some punters.
Fourth, this stock, besides not being for faint hearted, is also not for traders. With only about 10% of free float, or even less, it’s not interesting for the ones who want to buy and sell easily. We can like it or not, but Drake’s action in September/October 2016 (the TO) dry almost all the liquidity in this stock. It’s a very good stock for a LT perspective. For a STT, not much, and for DT, never mind it.
Fifth, the ones who are in the sidelines want, at least, one of the two following confirmations: positive analysis from a commercial lab; and/or starting of (regular) production. One of those (or both) will confirm the story that keeps us, holders, here.
Sixth, while pilot plant is being finished (and will be carefully tested and verified) it will be more realistic to not count with any kind of production for a while. Rushing things is never a good politic, and rushing things with a different kind of mineral is a very good recipe for a disaster. I strongly believe BBX management will be very careful with everything, all the steps and procedures, and that includes this TH: I bet (but I have no evidence) ASX wants to take a good look at every BBX ann. And this brings us to a crucial point.
Seventh: BBX will need money to drill and to keep things going (for example, commercial labs don’t work for free and BBX has a lot of samples to analyze). It will be naïf from us to discard a possible CR in the near future. This is not a sure thing, but is a real possibility. However, anyone who is a total outsider to this company and reads the anns and analyses the quarterlies it is pretty sure that a CR is imminent. We, shareholders, do know that BBX board is very conscious and careful regarding money spending, but a normal punter is not aware of it. And the market is made (also) by punters, and eventually those are betting on a CR as being soon in the horizon. And usually CRs are made with discount to the share price, so a punter expects to enter after the (eventual for us, sure for them) CR.
Eight: none of the above diminishes BBX efforts and results. I consider what they have done until now is almost a miracle. Consider this: it would have been very natural to the company to abandon this project in December 2015, when the results came blank. They decided to persist, and if we think that was an easy decision at the time, we must be nuts. They were and are walking in a very fine line since. But, step by step, they are going in the right direction. And sooner or later, they will have all the tools they need to show it not only to us, the ones who believe in the project, but to everyone. I am expecting a very happy year ending. But we need to be patient and not to expect a huge spike in the price nowadays with the current state of affairs. Our time will come.
