I too have not been happy to see such drops in the stock price as of late and see my portfolio dive bomb from its 52 week highs. I have my first baby due in just a few weeks and it sure would be nice to sell a few shares to get the nursery and basement completed by a professional. As it turns out, I am still the contractor completing this work on the week-ends and evenings after my 8-5 job. Sure I could sell some of my Kodiak shares. They are still in the green, however, what would the real costs be I would incur if I were to do that? I think a lot more than just the price of the contractor. Only time will tell, but I believe that a dollar saved at today’s KXL prices are going to be worth a whole lot more than just a dollar earned! Maybe I’m right, or maybe I’m wrong. After all, this is a very speculative sector. But the following is the heart of my prediction.

Yes we all know that Kodiak is sitting on a great property and have good management. We know they have lots of cash and are drilling more feet of drill holes then just about any other company. We know they have come forth with very good assay results and have shared these results in a timely manner, and have the most informative website in the sector. We know they have given tours of the property to influential writers, investors, and fund managers (NBF). We know there have been watchful eyes from large cap gold producers, the ones that are currently sitting on billions of dollars to eventually be used to acquire new minable assets. We also know that KXL has tested only a fraction their plethora of targets, and we know that all of these targets are located in maybe the most politically friendly environment on the planet. Yet with all these facts, the stock price has simply tanked!

So why am I still optimistic? Simple. I keep my eye on the goal. The goal is to prove up a minable asset. It’s not necessarily to mine the asset, but to prove one is there. Once we have that, we have something to sell. The selling price, assuming we have a buyer, will then be in direct correlation with the stock price. A great example of this is how Aurelian’s stock price recently reacted. The day Kinross made a bid to acquire them at (X amount), the stock price immediately opened at (X amount divided by total ARU’s shares) minus a few cents for uncertainty. Now that K’s bid has been rejected, there is no link to value (what another company is willing to pay for their assets) and so Aurelian’s stock tumbles like the rest of them. Remember, there must be somebody willing to pay a certain price for any one thing or really there is no value.

So my bet is not that the stock price will simply go up. My bet is that Kodiak will find both a minable asset, and an interested buyer. At that time we will see the real value, not just speculation, and at that time we will see a much, much higher stock price. In the meantime, speculators and come and go, and the stock price can and will go on spectacular rides in both directions.

If this asset is sitting in the ground waiting to be uncovered, Kodiak has the means to discover it. With $40 million in the bank and 8 drills operating 24/7… I think I will not sell my shares today. My baby should be much better off for it. In the mean time, I’ll save where I can and build my own basement.

Good luck riding this out everyone.