I think JID’s description of the market as very “risk off” was bang on. There’s a few market jitters and concerns on global growth and there’s not much appeal in either explorers or developers with no cash generating asset - so these are getting smashed the most, MOD even more so. If there is a market slowdown or tightening of credit these will turn into “zombie” companies waiting out for the market to turn and just do enough to turn the cogs without burning excess cash.
In my opinion people are waiting on the sidelines to see whether these current market jitters turn into something much larger. Whilst there is some overly geared companies and over priced equities/property I’m not an ascriber to this turning into a doomsday scenario and in fact is quite healthy correction.
There looks like a few questioning the strategy of trying to monetise T3 through development and what some think will be a large dilutive CR. I don’t think anyone can blame them for going through a PFS/DFS studies, they need to illustrate this is an economical deposit with a high level of accuracy. The larger T3 dome and T20 took some time to get permits to drill - there was talk the other day of 14 rigs out - no one can say they are favouring development over exploration in my opinion, it’s just been slow going.
Dilution is a necessary evil, and whilst it seems a lot of people would like to drill this huge land holding out over the next year, that’s going to be a big cash drain and still require feasibility level studies. The FEED and infill drilling required for the feas studies do burn some cash and is quite boring but the alternate was sitting on our hands awaiting the EMP approvals for T3 dome / T20.
There’s funding options available for T3. There’s probably a question of whether mgmt are doing development so that they have a generating asset and employment for the next 10 years. But I think they are well aligned with shareholders interests of maximising value and no one can say they aren’t exploring as the rig count is big and growing (Hanna and JVR are geos - they love to drill!).
The news flow is slow going and frustrating - all the talk of turbo charging and massive news flow hasn’t eventuated. Hopefully we get more assays from A4/A1 (good or not so) and details on T23 drill plans. Did anyone notice they have renamed the T20 project from “T20 dome complex” to “T20 exploration project”? Is the airborne EM showing this area may not be a dome style deposits like T3 as previously interpreted? or is it just simantics?
MOD Price at posting:
34.0¢ Sentiment: None Disclosure: Held
