Hi Esh,
I 1000% agree with you, dilution is death by a thousand cuts.
DCN has proven to be very savvy with their placements (except for 1 instance, which they have since more than redeemed themselves). Regarding the debt, I think what they have is very manageable and my main point was that compared to most developers it actually is pretty light on debt. Which I am confident (assuming they get close to their numbers) will be easily extinguished.
I think you point about gold producers that have the potential to radically increase their cash flow is very salient and when I look across the market, I can see only a few that really offer the upside I need to start repairing my shrunken capital base (after GCY). I feel that PRU, RSG, DCN and then in companies that are going to develop mines, WAF and perhaps CMM, with perhaps the safest options beign RMS and perhaps SLR/DRM but... I still think their short mine lives are a big issue and will stop the big end of town from throwing money at them.
SAR and RRL have shown me, plus NST of course, that once a company is able to prove that they are able to make real money, the market will reward you in spades. However, I think the NST/RRL/SAR etc are at best fairly valued now, so... the next section of the market to look at is who will move up in their place, or close to it.
btw - regarding Cameron well, they did indeed talk it up like crazy, but... then perhaps that just shows how good a showmen they are, as they pulled off the capital raising and now are able to focus on the core business of hitting commercial production and proving up Cameron well to a point where they can supplement the plant by at least 30k p.a.
Nice jump from $2.00 so far. I can only imagine that DCN will take advantage of the current AUD gold price and hedge a bit, even though, from chartists like Nord who see the AUD perhaps finally breaking their old record highs. I note RSG added a bit to their hedging, but... they missed a little cream already as I think they could probably get $1800 AUD in hedging in 2019. Amazing margins for those producing and it bodes well for the sector in general.
DCN Price at posting:
$2.32 Sentiment: Buy Disclosure: Held
