Chaco Resources Holders Board

omrothwell - 31 Dec'06 - 19:02 - 19106 of 19148


Well, that was a year of expectation, and one that should have taught us all that patience is definately the key.

If we look back to the first few months of this past year, all the talk was about getting the Primavera licence, and the sp was taken all the way up to 18 pence by Spring (Primavera), with "RNS tomorrow", "I have contacts", "an inside source", "I have been told", etc, but unfortunately it didn't come. But it did happen eventually, as things usually do, in their own time. Then when we were given this piece of news, what happened? What now? So what? Where do we go from here? There was nothing to speculate about any more, no immediate action in sight, and the excitement subsided along with the share price. Then the fast-money brigade left for other pastures, where they could earn mega bucks a lot quicker, and we drifted on lack of news all the way to the end of the year. The retrace was generously helped by the shorters, who helped it along. Then speculation mounted again in the form of drilling expectations. "an inside source", "I have been told", "a contact told me", "RNS tomorrow" started all over again, but folk were more wary this time, and the sp only fluttered a bit, and stayed around the low point, and will probably do so until its time to drill.

So what have we learned? Probably nothing, for as next year unfolds, it'll probably all happen again as is so predictable by now. The fast money lot will enter, the board will get trashed again, whether we stike oil, gold, water or nothing will probably not make any difference. The sp will spike, then drop back after the result, as folk realise they can't just turn the tap on, and oil comes out into the pipeline, (which won't have been built yet), and pour money into the coffers. No, it will still take a long time to harvest the find, as we can't buy and build the infrastructure til we know there is something to build it for. And when we do know there is something to build it for, it won't and can't happen overnight. What will happen to the share price in the meantime? The exit of the fast buck regime onto the next big thing will be followed by the entrance of the shorters yet again. With maybe another 6/8 months to wait until we can bring it online and turn the tap on, it will more than likely drift back again. To what point will depend on what the result was. Maybe if we don't strike oil , all the way back to 10p again. If we do strike oil, then maybe to about 60/75% of what the sp is on announcement.

But what we must hope for, is for Primavera to be quickly followed up with another well, presumably in Pueto Lopez, and then even another, which should be the second Primavera to comply with the licence, for this can then consolidate the sp at one level whilst we are still keenly focussed on the next drill, and so the momentum can be maintained. If the timespan is too long, this could well allow the sp to settle back again, but if there is something to keep the interest and speculation going, and keep the money in the share, then we could see the share keep all its gains. By the time the second well is done, and maybe the third too, we could see a lot of the infrastructure in place at Primavera, and we will be that bit nearer to production. Thats what I call continuity, and is something we have been sadly lacking.

But it rarely happens as it is hoped or planned, and much can happen along the way. Our esteemed directors did tell us a long time ago that we could expect a period of volatility in the share price. They have been right so far, and I see the volatility continuing well into the coming year too. They also told us a lot of good things too. I am confident that all this good news will be coming our way during this next year, and that by the end of 2007, we will be a completely different company to what we are now.

Although many of the ups and downs in the share price described above, are so very predictable, it is tempting to use this predictability to play the market, and make money in and out along the way. However, whilst many people do, I am not that clever, and would surely miss the point to buy or sell, and end up watching the train leave, still standing on the platform. Thats why I chose to buy my shares, for cash, with money I knew would be locked away for a long time, and I have chosen to leave it there, come what may. At no time have I been tempted to sell them, for I have confidence that eventually this share will be worth a lot of money, and I could never risk losing out, by being impatient or out of the share (Sods law) just at the important time. I am not in a hurry, and although I don't care if this share is at 6p/10p/16p, or whatever at the moment, it doesn't make me worry about it in the slightest, for I know that sometime, presumably this year, it will be worth a multiple of what I paid, and my hunch is maybe in Springtime again, (Primavera) we will see new heights. My forecast of £1.69 for CHP by the end of 2007 is not a wild hope, or guess, but a realistic figure which may be achieved if things go right for us in the drills. Thats what counts in the end. The drill, and nothing else.

Have a Happy New Year, everybody, and may 2007 be a good one for us all. omr