A Post From Ray

To review the main points, the market was not happy with the FM terms of agreement. I have to admit I felt a little let down as well, however, there are valid reasons behind it. Shareholders can nicely share the risk in small portions, but a major company has to pay seriously and make a leap of faith. Problem with doing that is that permit process and the final approval has to be a significant risk to the large investment they have to make to fund NAK through the permit procedure expenses. It would be best if NAK could sell have sold after they had their permit, would get a good price then, but they cannot so it has to be sold at an attractive price. Does not necessarily indicate that it’s value is not as good as perceived, however, the market will insist on making that connection.

Many shareholders were seeing this somewhat as a trade on the basis that value should increase over the recent developments. Well it sort of did, 2017 was a good year for maintaining a trend. I was hoping for a little better, not necessarily a lot better than what happened. I see the basis for advance based on uncovering the reality that there is no reason to oppose the mine. While at the same time I think Pruitt and Trump do not have as much influence as others expect, as far as the process goes they are also waiting on the sidelines, which is the way I think it should be. The less they interfere the better. So now the shares have to go through a transition period. The concept of seeing it as a “Trump trade” did not quite work, and it is becoming a long term investment for the buy and hold type of person instead of being a trade. The next interesting development I see on the horizon is seeing that the company is going to prepare an economic study. That may add support to people willing to settle in an make this a long term holding.




I see these shares as small bonds that do not pay interest, but appealing since they may potentially appreciate at 20 to 30% per year which a person would not find on the bond market. So 12 months from now, will the shares be 1.25 times 1.68 or at least 2.10$/share? Yes easily can do that, and 2.63 the year after, should be no problem there, or $8/share say seven years from now in production, easily reasonable and maybe conservative also. Should be various ups and downs, and shares could easily do much better, but it may be they will not be seen the same as shares for trading…
-Ray

Stock Market Opinion




Leave a Reply

Be the First to Comment!

Notify of
wpDiscuz