Here is another stock that is disappointing the market. NWR has plugged from 15c to 10.5c today on the basis of its announcement today that it will need to perform more drilling of its orebody extensions to upgrade its resource. That seems like an over-reaction. The company has $9 million in cash, and the company is capitalised at just $13mil, thats putting just a value of $4mil on its idle treatment plant and 230,000oz of high grade gold that must be worth a quid at $A1000/oz. Most mines go 4-6g/t, but this one is 23g/t. They have several prospective structures. I see the delays as just a sign of the difficulties contracting mine services in the current environment. I am suspicious about this project in several respects:1. I am accustomed to being disappointed on refurbishments of 2nd hand plants. Is it going to be a case of turning on the electricity, or does the plant require a major overhaul. It strikes me as poor disclosure that such details are not released to the market. The biggestr problem with these plants is rust if they have been using saline process water, as they are inclined to do in the desert. On that basis I am sceptical.
2. Might they have a nuggetty gold effect, where the consultants worry that they might not have as much gold as they think.
Andrew Sheldon www.sheldonthinks.com
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