An increasing number of retail investors are shifting away from questions of whether or not a potential investment target is a strong business or not, and towards questions like ‘are they marketing themselves to investors?’
That’s because, investing is game theory. It doesn’t matter whether you’re the smartest guy with a balance sheet or not. What matters is whether other people share your view of that balance sheet and are investing their money accordingly.
Sometimes all that matters is how much coverage a company is getting.
Equitas Resources (EQT.V), which if you’ll recall, was one of our founding sponsor companies (and started as such at just $0.045 a few months back, only to be topping $0.095 today), got a nice big write up via the folks at Market One Media, which landed heavily on BNN.
“The main advantage of operating in Brazil is cost compression,” stated Equitas President and CEO, Chris Harris, in an exclusive interview. “Capital costs in Brazil have come down dramatically in the last year, which has created an immediate opportunity to develop a junior explorer into a producer at a very reasonable cost.”
Interesting notes within:
EQT recently entered into a binding term sheet for up to a US $6 million dollar finance package with a subsidiary of the Cartesian Capital Group. Cartesian is a multi-billion dollar private equity fund that shares a similar philosophy to Equitas in developing highly scalable gold assets with near-term production and low all-in sustaining costs. The finance package consists of an up to US $5 million revolving gold prepayment loan facility and US $1 million in equity.
Also:
By going about this development as a series of stepped increases in gold production, EQT believes they are de-risking the company and providing a lot of blue sky potential for investors looking to acquire a potentially low-cost, low-risk gold junior with near-term production goals.
I call this the Integra Gold approach, and it’s something we’re also seeing from TransAtlantic Mining (TCO.V), which I talked about yesterday. Go where you know the gold is, poke around at it while you’re digging it out, and let it tell you where it leads. NI 43-101’s be damned; if you can see it, rip it, and keeping ripping until it’s done.
Other coverage is gathering out there, as cited in the BNN piece:
“Equitas will undergo a real transformation in the next 6–12 months, as the company converts itself from a Canadian explorer to become a Brazilian gold producer,” stated Thibault Lepouttre of The Caesars Report.
So here you have me covering coverage that’s citing coverage in its coverage.
If you’re investing based on who’s being well covered, hell, Equitas just did the trifecta.
— Chris Parry
FULL DISCLOSURE: I’m a consultant to Equitas and own stock in the company. When it goes up, I eat steak. So I’ve eaten a lot of steak this year.