Buy The Real Deal, Not The One Feeding Off The Scraps
In my opinion there has been a lot of hype right now about the current play that is "hot", that is the Cordillera del Condor area in Ecuador. Aurelian recently intersected some of the best grades in a long time there.
Now of course every time a company like Aurelian makes a huge break with great results, there always seems to be a big rush to claim all the land around the first company's claims.
In the case of Aurelian, there are now several companies vying for investor's attention by saying they are right beside Aurelian and they will find grades just as good or even better than Aurelian.
Now I don't buy this and I think investors come out better time after time going with the real deal rather than the tiny companies feeding off the scraps.
The last hot play that I can recall was the Mont Laurier one of which Nova Uranium was the top dog there. They kept quoting 77 lbs historical resource and during the time period until the drill results, the price rose 1097% from bottom to top.
Soon after the Nova hype began, three companies began marketing themselves as having property right beside Nova: RSC, CBP and ORE.
Let's examine how they performed from bottom to top and why.
RSC: 350% gain. Pretty good but this was not because of the Mont Laurier property but because of their property in the Otish Mountains. RSC is not the right Mont Laurier play but I think it is the right Otish play.
CBP: 190% gain. Also decent but much worse than Nova.
ORE: 350% gain. Same as Nova but again much worse than Nova.
So there my short little analysis of how the companies performed with Mont Laurier play. As it is play to see, the first and original play performed the best by far.
So now that we have the next "hot" play going on in Ecuador, I think it is best to play it with ARU. They have been there since 2001 and have had more than 5 years to pick the best claims. If they felt there would be gold where the current scrap players are, they would have claimed it years ago.
There is always a chance the Aurelian team overlooked something but speculating is a probability game and I think there is a higher chance that ARU will perform better than its surrounding "scrap" plays.
Also to note is that I quoted gains from bottom to the top. Since their top, all the stocks are down heavily. Nova is for example down 81% so this emphasizes the need to sell these speculative stocks when their trend reverses.
For a touch of humour, here is a cartoon that I think relays my idea on the area plays:
