Thursday, December 8, 2011

December 8, 2011 Edition of the Stateside Report

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4 comments:

duncanmcl said...

excited the see your lst of companies selling for under $10/oz of reserves....just bought into XMet

Worldly Trader said...

Vince, I have spoken to people in the junior resource sector and they have told me that certain companies sit on great projects without doing much with them. This seems to be common in the junior resource sector.

Management or directors of a company maybe on the board of several companies. Many of the junior companies do no pay their management a salary so they are compensated with stock options. If a director sits on the board of several different companies they can clean up on stock options. They may market the company once in a while just to boost the share price and cash out their options. They may also want to have the company bought out as fast as possible and sell their shares at premium.

Unfortunately, that means certain companies and projects do not get the attention and effort they deserve. I think this is changing since the market is being very picky and investors are not buying into any old story.

I don't know if this is the case with Oromin Explorations Ltd., but sometimes a company with a great project can just go nowhere. I also think investors are becoming less tolerant of go nowhere/part-time management. Shareholders realize they can force a change of management if necessary to move a company and its projects forward.

stateside said...

Hi duncanmcl - yes, xmet is one of those unloved under $10/gold oz juniors. At some point, the value has to start being realized....the question is when?

stateside said...

Hi Wordly Trader,

Oromin has a great project and this will eventually be a 10 million ounce deposit. Oromin management purposefully down played any good results.....I know it sounds counter-intuitive but there is no other explanation. Even when they had great news and great assays they would release the results only reluctantly around 7 PM on Fridays. They did this for years. Finally this year they starting growing up but they diluted from 40 million to over 130 million shares at low PP prices because of their actions over 4-5 years. Close to being criminal.

stateside

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