Fortune favours the brave, and shareholders of longtime Slumpy McSlumperpants Logan Resources (LGR.V) have been most assuredly brave if they were still about to take advantage of today’s 117+% share price jump.
After a six-month ordeal last year in trying to close a deal to acquire a wearable technologies company, that ended when said company couldn’t get their documentation together, Logan was trading at $0.04 as recently as February, for a market capitalization value of just $600,000.
You could have bought the company for the cost of an East Van studio apartment.
But you wouldn’t have. Because it was deeeeeeeeeeead.
As of today, it’s alive and kicking and sitting an option to bring in up to an 80% interest in four of nine – count ’em – nine gold properties, and that $0.04 share price is now $0.25.
How did this happen? Well, they raised $2.2 million, which is no mean feat for a company with baggage. Then they got Pilot Gold to agree to give them what’s essentially a first look deal.
Logan will do exploration work on the properties, using their $2 milly. When they’re done giving all those claims a thorough scrubbing, they’ll pick four to take a majority piece of. The rest they’ll toss back to Pilot who, presumably, loves the idea of someone else spending their money to run a rake over their claims.
To get to the 80% ownership level, Logan will have to spend $3m in exploration, send almost 10% of their stock to Pilot, and then complete a pre-feasibility study on them.
Given their cash position, assuming they find something even of a passing grade, they’re in business. But the definition of ‘business’ is relative.
If you want specifics, you’ll find them all here. I don’t.
That’s right – I don’t care about what they bought. It’s too early for me to give a shit about the properties proper, and whether there be gold in them thar hills, because for the next few months, this company’s fortunes on the markets will be about whether or not people want to buy the stock, not whether there’s a good reason to hold the stock long term.
TOP TIP: Buying on the Venture Exchange is all about game theory. To paraphrase an old joke, I don’t have to be faster than the bear chasing us, I just have to be faster than you. In other words, I want to buy the stock before you do, and sell it before you do.
A lot of people bought this stock over the past few months, in bits and pieces, leading up to this day. Those people knew what was coming and you didn’t, so let’s give them their double and move forward.
The people who got $0.10 stock in the financing? They’re also making bank. Good for them, but what about you?
Now the question becomes, is Logan going to double again? The answer to that is, no, at least not in the short term. But it will likely rise a bunch given that its current market cap is just $12 million.
Let’s assume this opportunity, to own a piece of properties Pilot Gold can’t use, is worth a million bucks. The company just raised two million. It’s now 5c away from the point where $0.30 warrants kick in, which will see the company raise about another million.
So we’re at $4m of worth before they do any work.The chance that they’ll find one of those gold properties is worth pursuing = high, and that will bring many multiples of value, should it happen.
Will it go up? It has almost to. Should you buy? That all depends on your risk/reward ratio because up today may be down tomorrow when those early dogs start taking profits.
You’re playing poker and you’re late to the table. You’ll want to assess the situation quickly and bid accordingly, and know exactly when you’re going to get out.
— Chris Parry