Perspective, page-32

Given this thread still has legs a fortnight on I'm breaking my no WAF post stand for a Perspective cameo update.

I have no doubt the biggest issue with WAF right now is the jihadist violence. If you have been following the news there have been a number of other mass killings and IEDs around the northern border region since the unfortunate death of a Canadian geologist early Jan. This is not the sort of environment or risk that many investors signed up for I'm also sure, and everyone has to invest according to their own risk tolerance and judgement. It could go from bad to worse, it could be catastrophic and become uninvestable. Those who no longer want to take that chance need to get out, on market, there is no other way.

That said Burkina Faso has had jihadist risk for over 3 years (multiple terrorist events and 3 bombings in Ouagadougou). Things have deteriorated slightly but not a lot, where was all this risk aversion during the M1 Sth discovery and excitement? Great exploration results are surely rose coloured glasses lol.  I maintain that the 'Orphan Period' exacerbates the negatives and mutes the positives for obvious reasons associated with the original post on this thread. It's a little like bull markets vs bear markets. One ignores bad news and celebrates good news, the other ignores good news and punishes bad. The situation for a gold mine south of Ouagadougou in the middle of friendly tribal lands really hasn't changed much, not since 2015. 

Now that's not entirely true to be fair. In what Soros calls "reflexivity" (a two-way feedback loop exists in which investors' perceptions affect that environment, which in turn changes investor perceptions) the fear and selling begot by more recent jihad violence has created a self-fulfilling feedback loop of justification that the violence has significantly increased risk and an increased the risk premium. To that extent reflexivity has changed the sovereign risk discount whether it real, fair or not.

I'm not one for ignoring reflexivity, I'm one part investor and one part trader and if I sense the tide changing I will dump and run often as not. However, at some point the selling and running goes fundamentally too far such that despite the fear of avoiding a falling market (baseless or not) in more buyers step in than risk adverse holders sell out. I went over this earlier and IMO somewhere around 20c is a long term bottom, especially given the gold price strength and assuming that the security situation around Sanbrado does not materially deteriorate. Again, I went over this in earlier posts and my strategic analysis says that the violence will be contained well away from Sanbrado and is highly unlikely to actually impact on mining operations. Therefore, I still see this time as part of the Orphan Period with those risk adverse holders selling out at a loss until they are gone and the price can rise to a new equilibrium. Not saying selling at low 20's is done, especially if the gold price corrects back, but soaking up sellers in volume takes time.

Something else I started off on this site discussing was the governments sacking (also the head of armed forces since) and what that might portend. I saw it as a signal to internal and external players that a new harder line was to be taken and some push back to defend against terrorism was in the wind. I'm not sure this jihadist movement in BF is more than ignorant and uneducated thugs trying to raid towns for whatever freebies that can steal while 'striking a blow against the infidels'. Hopefully I'm right but as per the below news article we should see soon just how determined the jihadists are to push further into BF or otherwise pull their heads in a bit while they still have them.

https://www.apnews.com/90c7f643e7144ac382de146f955ec921

Burkina Faso forces kill 146 jihadists after village attackBy ARSENE KABOREan hour agoOUAGADOUGOU, Burkina Faso (AP) — Burkina Faso’s armed forces have killed 146 jihadists in three counterterror operations in the northwest near the border with Mali, the army’s commander general said.The army’s response came after armed men attacked Kain village in Yatenga province early Monday, killing 14 people, Gen. Moise Minoungou said on national television Monday night. The army response, including air support, included fighting in Bahn in the north region and Bomboro in the Boucle du Mouhoun region.The statement said there were light injuries and no deaths among security forces.Islamic extremists in recent months have increased attacks in Burkina Faso’s volatile Sahel region. A Canadian man was recently kidnapped and killed, and another Canadian and Italian are missing.Gunmen in the past week killed at least 14 people in attacks on a marketplace and military base in the Sahel region. The base in Nassoumbou, in Soum province in the northeast, also was attacked in December 2016, with 12 military personnel killed.Burkina Faso is part of a five-nation regional counterterror force, the G5 Sahel, launched in 2017. Other members are Chad, Mali, Mauritania and Niger.

I sincerely hope the good people assist the armed forces in identifying and making difficult those that seek to reek carnage and steal under a false flag of religious ideology. I'm sure that 90% of the population want to go safely about their business and feed their families, not live in fear of violence or reprisal. Lets hope for the best for everyone's sake.

PS.. a number of posters still think that management can/should be doing something for the suffering shareholders. Nobody had offered up a reasonable idea that I have read, management cannot stand in the way of determined sellers. Would management have been better off not raising capital at 25c (discounted from 29c) or better off waiting until the new year and jihadist terrorism to raise the money?  In hind sight if they waited the share price would have been smashed much lower between the terrorism and the still pending cap raise guillotine. They are what you call caught between a rock and a hard place. The rock is their real masters, substantial share holders, who vote them in or out of office and invest for the long term but do not suffer short term anxiety like some retail punters on this thread. The hard place is a hundred phone calls from retail shareholders who want the share price up now with whatever it takes. Management can really only get on with what they can control,  building mines and adding value best they can while waiting for market's recognition or the takeover to come (and I'm sure that is the exit strategy management and long term substantial holders are waiting for). Honestly, it happens to so many well run juniors with great projects it isn't funny... but its reality.

Good luck, radio black resumed