CARTOON!
I can already guess what Cassidy's president, JT Gillis will argue when he hears my case in favour of "CARTOONS". They are unprofessional! But I know them to be effective in informing ALL people, the simple and the sophisticates alike. They eliminate a lot of "Jawboning" explanation and they free management to work more effectively. I have some CARTOONS for you because I believe Cassidy's announcements are too much aimed at its elite, mining educated investors. In "days of yore" small shareholders benefited from a large population of broker's analysts trained to sift and sort among junior companies other than those in which their own brokerage firm was involved. Superior performance and potential were recognized and chronicled. It's no longer so for small resource company stocks.
So when an average investor sees that news fails to cause the stock to rise he is confused. If this is good news, why doesn't the stock go up and stay up? Cassidy publishes results without explaining their success. Management avoids inciting speculation. Through time this resulted in concentration of share ownership in "strong" hands. These fund providers are uniquely capable to judge the worth of the venture. They are putting in the money! They want the maximum number of shares for their money. They want the maximum spent on development and the least on promotion of higher share price.
But what is the universal measure of success in taking part in the market? To most, success is measured by the thickness of and denominations of the bills one folds away after selling a stock. Even if one is not selling one's stock at the moment, "bragging rights" count to provide satisfaction. Cassidy's small investor audience obviously doesn't have the sophistication to interpret results. Other companies put out a press release if the drill doesn't break down. Cassidy waits to announce assays from 25 or more holes at a time. The impact of a constant stream of information is lost. The lack of broader market following is to be very costly to small shareholders now when added money is needed. The risk takers who provided the "seed" money are seriously disadvantaged as to both value and liquidity..
My CARTOONS use the updated maps available (at last) on Cassidy's website. The originals show results accurate to three decimal places. I have highlighted the areas where significant additions and/or extensions are reported. I don't think I need to list and label these or address what they show. It's self-evident! This is commonsense.
For convenience my CARTOONS include notes of the resource calculations made for drill results up to September 2006. It is left to the observer to interpolate what resources have been added by the drilling results reported. My interpretation is that these cartoons show an incredible two to three fold increase in the areas found significantly gold bearing. I can make no estimate of the split in distinction between inferred and indicated resource that will be reported. THESE PICTURES SURE AS HELL ENTIRELY CONTRADICT THE HISTORY OF SHARE PRICE MOVEMENT. IT IS DOWN FROM SEVENTY FIVE CENTS LAST NOVEMBER (WHEN THE RSG INDEPENDENT STUDY RESULTS WERE ANNOUNCED) TO FORTY TWO CENTS PER SHARE.
My frustration about lack of effective shareholder communication does not dull my appreciation of the results reported. Opinions expressed in my recent " Ittsa Mine" blog is reinforced by assay results since reported. The indication of quantities indicated as added by the cartooned maps buoys me. I understand that such a map is not needed by the professionals. But small shareholders need to have someone "join the dots" in order to visualize the potential. Hopefully, someday, some simple vertical diagrams will be added on the web site to demonstrate that important dimension.
My next blog will deal with the standards and processes that govern calculations of resource, reserves etc, under National Policy 101. I expect to make some observations about the past reports by RSG in preparation of the report to be ready by September.. RSG will probably provide only a summary of their calculations at first. I hope the market will be impressed by the results and then again when the full report is available, by the (typically) cautious and conservative procedures employed to compile the result.
The question of share price is critically important to a company like Cassidy when its only source of "cash flow" is the issuance of equity: A mine of appropriate size to exploit only the Kourassa resource can cost approximately fifty million dollars. At current share price raising the equity would require the company to double its capitalization. But putting in the effort to gain even a dime more in stock price when one's shares are 50 cents is a "dilution saving" of more than 15%. That is not pin money. That is simply seeking capital in a manner that levels the playing field!
MAP#1__________________________________________________________________________________
MAP#2________________________________________________________________________________
MAP#3________________________________________________________________________________
MAP#4__________________________________________________________________________________
MAP#5_________________________________________________________________________________
___________________________________________________________________________________
Comments