My reason for comparing Crowflight to Noront is because you have to compare companies to their peers when determining a valuation, however I realize it's not a perfect comparison. In the case of Noront it will always be like comparing apples to oranges because Noront's find is special and the market--up until lately--has reflected the special-ness of this multi-mineral deposit in Noront's market cap. So what has changed recently? I mean the metals are still in the ground right?
For me the number of shares outstanding has become a concern. In the background it's been slowly creeping up and is now 4 times what it was when I bought my first shares of Noront, which gets me thinking, what will it be 4 years from now? I understand dilution is necessary, but the consequence is we have a pile of shares outstanding and no one is in the money anymore, which means it's going to take something phenomenal to churn through the amount of shares belonging to disgruntled share holders. Remember the early days of Eagle 1 when we traded 20mil shares a day? Are we going to need an event like that?
I have no doubt there will be other discoveries--some day--but we've been exploring regional targets for years and we have come up empty with respect to another Eagle 1. What has kept me in this stock for years is there's always been a carrot on a stick in terms of things coming down the pipe. For the last year I've been waiting for the definition of the convergence zone. I've long figured--foolishly or not--that drill results from the convergence zone would be the "event" that we were all waiting for. Maybe there's a hundred million tons of ore down there. It doesn't matter anymore--at least not right now--because the carrot has been pulled. Deep drilling is a bust.
This means we are dependent on another discovery or a buyout which may or may not happen. So if we are dependent on another discovery, I have to compare Noront's chances to other junior explorers who have markets caps of 3-5million and share structures of 20-40mil shares outstanding. Honestly, where would you put your speculative dollars? Particularly when gold, silver, potash, uranium and REEs make nickel look like an ugly step sister.
The market has obviously lost interest in this play, and to be honest, I have too. The excitement is gone. Will it come back? I hope so. From what I've learned in the last four years holding Noront is that anything can happen. My account went up half a million dollars holding Noront but I rode it down convinced I was right to hold and watched my original investment turn into a loss.
Anything can happen. Thus my comparison to Crowflight. Yes, Crowflight has financing problems, but who is to say Noront won't in the future? To the poster that said Noront is 2-7% nickel, I say Crowflight has 5% hits too, but the average grade for both is much lower and are relatively comparible. Crowflight has three times as much ore at lower grade, but without the copper and PGE credits, but with infrastructure. I'm no expert on Crowflight either, but I believe they turned down a buy-out offer at 0.21--over 3 times their current share price. I truly hope this is not Noront's future.
Anything can happen in the furture. Maybe Noront hits big on the next drill program. Maybe in four months their share price is 10.00. Maybe in four years their share price closes at 0.065. Who knows? All I know for certain is I can't predict what will happen. In the meantime, the market believes--and for good reason--there are better opportunities out there, and that's why people are leaving.
