Any Ideas?

[SD]

Does anyone have any idea why this share is dropping? Any signs of recovering anytime?

[_nova]

well SD the whole market is down and this one just followed. As long as you bought below 900 I wouldn't worry if I were you. I hope you don't have a short term view because WEZ is going to take at least another 3 to 4 years before it gets any kind of direction. This is a buy and hold share. About the only time that this one heads up is when the other resource counters go volatile

[Plonky]

Nova... you are so correct with your statement. This begs the question however as to why punters are even buying this share now. I agree with you that I will take years for any appreciative profits to be realised out of Wez. Why not wait two years and then buy WEZ for almost the same price. If you are not sure, put your money in the bank.... better than watching WEZ fall from R16 - R6

[Plonky]

Nova... you are so correct with your statement. This begs the question however as to why punters are even buying this share now. I agree with you that it will take years for any appreciative profits to be realised out of Wez. Why not wait two years and then buy WEZ for almost the same price. If you are not sure, put your money in the bank.... better than watching WEZ fall from R16 - R6

[SD]

Don't hold any of WEZ shares. But i see other general mining shares moving steadily upwards at times while this one just falls. Hense the qustion? Thanks for the replies

[_nova]

SD to answer you, WEZ is not producing yet, it's only eating money while they set up the mine. I think the earliest they will start production is around 2011 so the only people trading this share at the moment are long term investors and pure speculators. Plonky is right, no reason to buy this share unless you are taking at least a 4 year view that will allow you to offset the opportunity cost you're paying now. The aim of course being to bargain that the share price will at least quadruple by then...

[SD]

Thanks for the explanation.

[Major]

They are planning to start shaft sinking soon, which will consume a lot more money than they have in the bank. So their either going to have to issue more shares or get very large loans from banks who are not keen on lending right now due to the credit crunch. So market is discounting accordingly. Short term I'd go with a producing miner, but WEZ'll come right in the long term once they're in production.

[Mr_S]

In the long term, how high (once production starts) do you think this share can go? maybe within the first year or 2 of production..

[_nova]

Mr S I'm hoping for 2400 however, that's probably a bit too optimistic. A more realistic figure is between 1150 (Investec valuation of a year back) and 1750. I would expect 1750 within the 1st year of production as very achievable. It will of course all depend on forward PE once they get going and the potential earnings yield as offset against the startup cost. I think this is most likely what serious investors are going to look at

[Shaun_Siddall]

Production is the key - as mentioned earlier finance is a huge problem.

[louisg]

I would say that earnings are the key. Why don't you wait for them to start making a profit first?

[Maggie]

As I have many of them I have no ideas apart from visitng my shrink!!!!