TRY 0.00% 3.0¢ troy resources limited

It was easy to make money buying any gold stock. Unfortunately...

  1. 1,533 Posts.
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    It was easy to make money buying any gold stock. Unfortunately those miners are not making good profits or sometimes no profit at all. Recently the South Africans gained due to the weak Rand. But now that the Rand has become so strong again profits should come under pressure. It is always a bad idea to be dependent on the market. Troy has good fundamentals and not only will they make money at $1000 gold price but at far far lower gold prices. The Guyana gold royalty will come down from 8% to 5% if gold goes below $1000 meaning total costs for Troy are near or under $500/oz.

    The problem I had with the mill issue is that while normally it is a non-event (production mostly shifted to later quarters) Troy was running out of cash. That danger is over now and next wet season they will be in fresh rock making thing much easier.

    I do not think big money is buying Troy because the market cap is so small. My shares won't return to the market for a long long time and I am owning more than any director (not counting Mr. Jones indirect holdings).

    Good point about the management. I am following this company for many years and I think an example for the Troy approach is how Sertao was handled. Small but high grade deposit not feasible because of capex bought for a small figure and then building a mine at a far lower cost than industry standard. And the old approach of just getting started, proving the feasibility of the mine and then exploring instead of drilling like mad and begging the market for the capex later on.

    They had so much bad luck with Casposo that it is almost a tragedy. While I initially thought they paid too much for Azimuth without that merger they would have gone out of business.

    I think the real dangers here are Troy buying another project at a price too high because they do not want to be dependent on a single project (maybe influenced by the Casposo experience?) or a takeover attempt. Any takeover attempt would most likely not consider the excellent exploration potential and I am ready to vote down any such attempt.

    As for the share price it could very soon make a breakout on its way to 90 or before that see a breakdown below 50 and then most likely to the low 40s. I have never been a good trader and will just ride out the storm if it comes.

    All the best too.
 
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