Vulture Bargain Road Kill Chart for Riverstone Resources - RVS
By request we share the same chart for Riverstone Resources (TSX:RVS.V or RVREF) we first shared at the New Orleans Investment Conference in October of 2011 just below (updated through today, Wednesday, May 16). In this buyer's strike/panic selldown for mining shares, like many of the issuers we track, Riverstone has moved into what we call “The Blue” on our long term monthly charts – the area we consider as a Vulture Bargain Road Kill level. (An area where the panic-assisted price (as opposed to “value”) has become extraordinarily compelling looking longer term, if one believes the world will not fall into a global deflationary abyss.)
We also update readers on our own scheduling just ahead.
It takes a market as petrified and paranoid as the current example to drive a high quality advanced explorer like Mike McInnis’s Riverstone Resources to such a low level as we see in the chart above. Notice, however, that the last three monthly trading bars, which have loped the share price of RVS down from the $0.70s to the low $0.30s have occurred on relatively low volume.
Yes, the current price for RVS has been pummeled, but not because Riverstone did anything wrong or had really bad luck. To the contrary, by our reckoning, with the exception of some slow lab turnaround time for thousands of pending drill samples, the company has been hitting on all its exploration cylinders. RVS has already proved up 2.7 million shallow, relatively easy to mine ounces of gold in Burkina Faso, West Africa.
Riverstone is just another victim of the brutal buyer’s strike and rush to liquidity underway and at this point sellers are either forced to sell or panicked into selling. No one would intentionally or voluntarily sell RVS at these Ridiculous Cheap prices in our own opinion.
Riverstone is one of the issues we had in mind when we recently sold a small amount of our physical gold (in the $1640s) in order to take advantage of the panic sales underway today. Full disclosure, we very recently added to our stake in RVS and intend to add more in future full-panic selling jags if “the market” continues to be so bloody scared. Call us crazy Vultures, but with RVS trading down into ‘The Blue Road Kill Zone’ we believe they have become a tasty takeover target for the Iamgolds, Angicos, Semafo’s and Kinross’s of the mining biz.
Not that we think RVS would agree to a takeover anywhere near the current mark. That would be crazy. These are times of exceptional opportunity – for investors/speculators and for the mining companies that have to replace resources to survive and grow.
As we said in yesterday’s chart update of TLR, our view is that we are in another 2008-style panicky period, with the causes of that panic ultimately being supportive for gold, silver and the companies that mine them. While in the panic portion of the event (now, as evidenced by the USD rising for 13-straight days and bond yields cratering to 2008 panic levels) we are served up generous portions of resource company Road Kill as fearful sellers hit the weakened bid no matter the price in terror. It rarely gets better than this from a bargain hunting point of view.
That's if one believes the world is not about to end and the market will return to a more normal state in the near future. - We do not believe the world is about to end, by the way.
Everyone can and should make up their own mind about such things of course.
Riverstone will have something upwards of 50,000 meters of new, successful drilling to include in the next NI-43-101 resource estimate later this year (likely in Q3) leading up to a feasibility study scheduled for after that. We believe that the well managed company is on its way to proving up between 3 million and 4 million ounces at their Karma project in Burkina.
Additional information about the company here: http://www.riverstoneresources.com/s/Home.asp
Due diligence a must!
Repeat of our scheduling: In the past we used to take most of the month of May off for an annual hiatus. Although we won't be taking the entire month away, we will be quite scarce from time to time from now to just after Memorial Day. We plan to place some super-stinky stink bids and hit the trail soon, so hold down the fort. The markets will still be here when we return.
The usual tables we publish on Friday evenings will be delayed this week until either late Sunday or Monday and we will likely be exceptionally slow in answering emails over the next three weeks.
With that, we set the sea anchor, batten down the hatches and rig for stormy weather, but we won’t be abandoning ship just because people are getting scared again.
They won’t be scared forever.
”Are central banks going to stop buying gold? Are they going to stop printing money by the boxcar load? Are they going to let deflation ruin their inflation party? I don’t think so. How about you? Oh, and God doesn’t count time spent fishing against you, you know.”