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Mining market thoughts

Dorato Resources (DRI.v) saw more insider selling last week. Today somebody somewhere sold 350,000 shares at $0.57. That’s a long way off the $0.80 that Bedoya sold his second lot of 35k for last week. Last one to leave turn the lights out, please.

Interesting action in Chariot Resources (CHD.to), up 10% to $0.17 on high volumes. Last week the President of Shougang Mining met with Twobreakfasts and assured him and the rest of Peru that Shougang was pressing ahead with its $1Bn expansion project. The thing is that Shougang’s mine is right slap bang next door to CHD.to’s Marcona project; in fact CHD.to bought the land from Shougang in the first place. So why the sudden interest in Chariot today? I dunno, but the pieces fit a larger puzzle.

Frontera Copper (FCC.to) is now the centre of a bidding war, which can only be good for those holding (e.g. reader AS) and the wider sector. Mexican group Invecture had been outbid by PCU’s 65c offer on Feb 4th, but today’s upped $0.75 offer for FCC.to. adds fun to the scene. Let’s see if PCU comes back at them. The stock has been trading at $0.79 and $0.80 today, so the market expects more action yet. Will they get it? I dunno. If you own, hold ’em. If you don’t, and you want to, be careful about your entry point.

Gold Resource Group (GORO.ob) is at $4.60 right now. All very nice for the holders, but it gives me a chance to show my own failings as an analyst. In an October NOBS report I put a target on GORO.ob of $3.92 with gold at $900/oz (and silver $14). Here we are close to that spot gold number and the stock has shot way past my target. I even mentioned it here on the blog a few weeks back when it stood at $3.78 and mused that it was getting ahead of itself and maybe it was profit-taking time.

This is a good example of one of my major weaknesses in calling stocks, something I’ve battled with for a long time. As a value-based investor that calls targets based on fundamental analyses I find it tough to layer on market psychology and sentiment to my targets. I still think that GORO.ob is ahead of itself here, but that is no disguise to the fact that my “take profits” call at sub $4 prices totally sucked. Just another reason why I really mean it when I write “DYODD”. After all is said and done, I’m just a dude with a blog.

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