Unique Window for Oroco

by | Sep 11, 2019 | General | 0 comments

After reading the technical report and receiving feedback from some investors, it might be the right time to think about where we are with Oroco in terms of investment timeline.

Some are surprised that the stock price did not move up on the release of the technical report. Yes, the report was good which means that Santo Tomas is worth a lot more than many originally thought. However, we are still at a point where the many funds cannot invest in Oroco’s shares.

When the stock price was $0.04, $40,000 bought you a million shares. So some of us acquired a lot of shares and our buying meant something. We, the retail investors, caused the stock price to go up 10x. Now, when we have $10,000 to invest, we can only get 20,000 shares. This amount does not do much to the share price especially when there is a seller that keeps dumping a lot of shares in the open market.

To have the same impact, we would need $500,000 to buy the same 1 million shares that we previously could have bought for only $40,000. That kind of buying power can only come from wealthy investors or funds.

The problem with funds is that they are more concerned about not looking stupid in the short term so that they can keep their jobs. If they buy and lose a lot in the short term, they might get redemptions or lose their jobs. Yes, they might lose out in the long term like they already did with Oroco, but their clients will never know how much they could have made them.

In order for funds to get involved in Oroco, two more steps need to happen. One is the acquisition of Altamura Copper, and the other one is the final registration of Santo Tomas to Xochipala Gold. The technical report was one of the elements that was needed to complete the acquisition. The registration of Santo Tomas to Xochipala Gold is simply an administrative step that will happen.

I believe that now up until these two steps are completed, we have a unique opportunity – we don’t have much buying competition from the funds. Impatient investors are selling and we can get as many shares as we like. Then, when the funds come in, we can just watch our wealth grow as they will be fighting over the limited number of shares.

I still don’t see anybody except me and Caliche writing about Oroco. I believe that this will change soon. Until this and the other two steps happen, don’t be disappointed with the share price. Take advantage of this window of opportunity. The management is executing on everything they promised. They are winning every legal step that they are fighting. Two more steps and everything changes.

Disclosure: Long Oroco

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About Mariusz Skonieczny

Mariusz Skonieczny is the founder of Classic Value Investors.