Thanks for reminding long term MUN holders and shorter term holders like myself of past events.
However, you have to remember that the only correct decision in 2008 was not to just exit MUN because its share price was falling, but to exit all equities. Most people hung on and companies such as OGC, PRU and AND ended up at 15cents, 30cents and 50cents by late 2008. MUN fell to around 8cents. It was not that easy to work out which were the poor performers and which were the relative duds because they all fell a lot irrespective of their prospects, particularly if they were cashflow negative.
OGC, PRU and AND have gone on to become stars in the gold pantheon (for the time being) while MUN has shown that it is burning more cash than it can generate to expand past its initial small mine. MUN is vastly undercapitalised for its ambitions and shareholders expect a lot for a little outlay, possibly because of excessive past ramping by its management and "Thin" Prophets.
We do have to look forward, although we should also be mindful of the past. MUN is now a very cheap speccie. It does have the potential to expand production to 40,000 ounces (short term at least) from which it should be able to earn a surplus. That surplus can be deployed elsewhere (Peru) to hopefully build a more significant mining operation. This is its one (possibly last?) chance for glory and further growth in its other prospects where it might become a future smaller OGC, PRU, or AND.
For a few cents MUN is worth a punt. For those willing to accept the high risk that goes with the potential high reward, let us give MUN a go and judge its progress against set targets rather than just revisit old wounds.
However, I suppose it is always a good idea to remind ourselves how difficult the gold sector is to operate profitably and that our hard earned can vanish fairly quickly unless we exit them - eg AXM being a recent example while RSG continues to struggle with its operations at its major African mine.
I am looking forward to the next quarterly report to check progress, and I expect that until Crista is operational in late Q3 2010 that MUN will continue to be cashflow negative. The Q4 2010 quarterly report to be released in January 2011 should provide some relief to shareholders by giving MUN a profit base from which to begin to build its future without a too heavy level of shareholder dilution.
loki
MUN Price at posting:
9.8¢ Sentiment: Hold Disclosure: Held
