Tuesday, January 20, 2015
Dalradian: to da moon, Alice?
Still going up, still on volume. And if Goldcorp will pay $440M for Probe Mines, what will someone pay for Curraghinalt?
The problem, as our lad in Peru reminded me yesterday, is the 10 million or so 90 cent warrants coming due on February 19th. That's supposed to mean a share price overhang, right?
Then again, warrants in the money only really means that DNA gets a $9M cash injection. And at this moment the market might feel that DNA will provide them with value for money on that $9M. Warrants becoming cash only looks bad when the market thinks that money will be wasted - drilling when all hope in the gold price has been lost, keeping the lights on through a 15-year secular bear market in commodities, and so on.
Yes, warrant holders could dump their stocks and hold the warrants, but I think they already dumped the stocks a few months ago, don't you?
So if you were a junior gold investor with both shares and warrants, and you saw gold skyrocketing higher ($1291.90 at this moment) and development plays getting bought out because (as Cookie notes) the majors are running out of reserves, would you dump your DNA shares right now, or keep them?
So maybe overhang is only a problem when gold miners suck™. But since gold miners are totally awesome now™, the overhang mysteriously disappears?
So maybe the $1.08 target gets hit.
Oh, uh... but that Kaminak post reminded me to check the weekly....
Uh... and a print of $1.08 then activates the big 18-month W pattern, which targets about $2.
I mean, if you believe in that TA bullshit.