DRK 0.00% 1.2¢ drake resources limited

game on

  1. 3,687 Posts.
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    since there has been no market action since dec 24, I am getting a little twitchy with a lack of adrenalin in my blood. I need some stimulation.

    Lets start a new conversation.

    Pouring thru the DRK anns over the last few months, I note that the initial budget approved by the JV was 1m$ back on May 13. It seems as this initial amount was to cover the first 17 holes for 3600m of drilling over a 6 month period, although the nexus between the $ spent and number of holes drilled is not entirely clear in this ann, however lets make this base case.

    In the latest ann, DRK said that 13 holes had been drilled to date, of which 3 were repeat, so only 10 have really been drilled.

    The initial budget funds must be getting close to running out, if not already have run out. This opens up the door that RF will be be able to pull out of the JV if they so choose....

    It is a very interesting position DRK are in as they will not be privy to what the "corporate" discussions of RF are, but one would assume that because DRK are the operators of Falun Bersbo, they would atleast see how much of the 1m$ has been spent thus far on the project, but be absolutely powerless to make financial committments over and above the budget allocation by RF. In this light DRK are at the mercy of RF.

    I see 2 significant decision points very soon by RF -

    1. Once the initial 1m$ is spent will RF withdraw due to lack of good enough results?
    2. Whether RF will approve the additional 2m$ expenditure to allow them to get to 51%? If yes, this is a very promising sign for DRK for the next 12 months. If no, assuming there is a good take up of the options ($27m @ 20c = 5.4A$), maybe DRK can go it alone.

    For those who are undecided to exercise their options (of which I am sure that there are many out there), I will be exercising my 101k DRKO's. As I can afford to exercise, and like the fact that DRK are nearly cash backed (cash + shares). Also, some other posters have pointed out that DRK are in a relatively low downside-risk situation.

    I personally would like them to be taken over by the JV, and seet this as a very likely outcome for DRK the more I think about it. DRK are loading up on Swedish tenements they own 100%, which will make it an even more tempting package to the JV is there are good results in them.

    Good times ahead folks. But I reckon this will be the second best stock of 2010 behind NKP.
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