Thursday, January 10, 2013

Copper Fox - The last big positions have cleared

I know one person who had to liquidate but that is over. It seems that more than one did the same. Some of the other people who were beginning to feel the pain almost capitulated too out of fear.

We invest in fundamentals and often are seen buying when others are selling. In the case of Copper Fox nothing has changed. What I've written about the deposit is true and no one backed a truck up and stole the pounds in the ground.

The only thing that has changed is we have moved a little closer to the formal demand for the Liard royalty shares. It is expected that tax loss sellers will return and this should add to the buying pressure. We should also see some speculation before the full BFS document is filed because it's widely believed that Teck will make their offer. Personally, I don't see them being in a rush but considering what's a stake them may well be in a rush.

With just 2% of the property drilled and a known trend that has been lightly touched there's reason to be excited. If insider buying is any indication of the convictions then we all have reason to be optimistic.

I'm expecting a slow rise this week followed by an unsettle week after. Then if things are going to heat up that's where it'll happen. People could get in early and cheap but they are creatures of habit and will momentum ride rather than sow their seeds early. That is a good recipe for chasing a stock and getting caught when you think it will continue to go up. There are many like me who know every nut, bolt and rock here and all we have to do is watch the late comers volume to make a good profit. We are so familiar with the stock that we can gauge the appetites of the free riders.

Why is the full document so important? It signals the start of the 120 countdown to Teck making it intentions known and written in stone. Typically, Teck does not run out the clock. Google them up and you'll see that they act fairly fast. The reason is that they follow the development. As long as you play fair ball they play nice. Most people here think 30 days is enough.

As for the BS that Teck will offer 30% on the sp. Are you kidding? This project is insider controlled. Teck will have to make a fair offer or take a royalty. If CUU got its hand on $60B worth of minerals majors would fall over themselves to buy it. You have to read the contract to fully understand why the BFS is the way it is. It was a contractual requirement.  Teck wanted zero fluff. For the fluffier cases look at the ROV. Teck wanted the worst case and the real world case. They use both.

Why not drill up the waste and convert it to pay dirt. Like I said before, Teck was comfortable with the limited drilling. The results obtained show that starting at the surface it's mineralized. This is why CUU went exploring to show the extent of the trend. People forget there are 7 anomalies! Several of them have had no work to date. All the geo science work to date shows a 1 to 1 correlation with the stuff that has been drilled.

If you do not understand this you can call the company and ask. You'll find they are very helpful. There's a show in Vancouver later this month where you can ask questions and be given a guided tour through the company's materials. This is probably the last opportunity you'll get to buy into a major development in the next 3 years. I expect 2015 to kick off with a bang but that doesn't mean major discoveries will be made in BC. Discoveries are just that, discoveries.    

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