Originally posted by rjohnson1234
I agree. Wait till we start drilling and receive some pictures and results.........folks will be falling over themselves to come and post here how they can’t believe they missed out...........well even at 50-70c around drill action time is still great buying and a few easy bags from there ....much less from current levels !imo
I'd love to agree with you here RJ but unfortunately in this case I don't.
We have the POSCO transaction as a very real indicator of value that can easily be compared back to our drill results. 2.5Mt for $250M USD.
Lets say GLN hits 2.5Mt as well. The market will not value GLN at $250M - it would be great if it did but it simply won't be the case. $250M is a buyout value, so it will sit signification below this. If we had 2.5Mt I'd be happy to see our SP at a $120M (AUD) MC as who in their right mind would just be paying full price for the asset leaving them with no upside (I'm talking shareholders buying at an MC of $250m USD when it's worth $250M USD. Nothing to gain). That's an SP around $1 odd, and to be honest, may even be optimistic. Admittedly I wouldn't be surprised to see a spike to around $1.50 (most new finds considered valuable go beyond what is probably more fair value for the time in the cycle) but would consider it overvalued at that point in time (not necessarily in the future, but just at that particular point in the exploration cycle).
Due to this, I don't see us hitting 50-70c even during drilling. For brand spanking new explorers, this just leaves upside way to low for the risk (even though we're all pretty sure the risk is super low right now).
If we were to hit 40c during the drilling I'd be content. That still leaves upside of 200% to the above example, but the only thing I think could get us there is new money. Anyone bullish on this already probably has taken their fill and then some. I'm probably 50% over exposed and still tipping in every time the pennies add up to enough to have another dip.
Then there is the alternate to consider - if we don't have 2.5Mt. Mattilla's latest example based on Galaxy's recent drilling came up closer to 1Mt. All the numbers above could be reduced pretty significantly if that's the case.
This second example explains why I think 40c is about as high as it would get. The short term gains are just so much lower in that case.
The team are doing all the right things to make serious coin. Depending on the result it could be in the short term, or even in the case of a 1Mt find, there will be multi baggers, it will just take a few years to come to fruition, unless an offer or TO comes up earlier.
There are of course many other variables to all of this. Price of LCE is one simple example. It goes up and expectations could go up with it. Down and the reverse could be said.
My strategy is always 'assess and reassess'. Once we know the results, it will be another time to reassess.
Here's hoping I'm wrong but I'm happy for my opinion to be on record with the above.
And if it isn't clear, I'm nothing but bullish here, but perhaps call it conservative bullish in the short term.
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