Three of four Dublin-listed exploration minnows posted ever deepening losses on Monday. The one outlier was also firmly in the red, although it was less than in the previous year.
Oil and gas explorers Petroneft Resources and Aminex and miners Ormonde Mining and Great Western Mining reported to the stock exchange that they were making progress in the quest to deliver value for shareholders but, for one reason or another, they’re just not there yet.
This is by no means exceptional, but with four reporting on one morning it has had the effect of putting a magnifying glass to the sector, raising the question as to why one would ever choose to invest in such a risky and unpredictable business.
It's not as if there's one unifying issue such as the global economy which can be blamed for the progress of these penny stocks. Petroneft, for example, is still looking at the possibility of offloading its assets, Aminex has been caught up in an arduous approvals process in Tanzania, and Great Western said it would soon have to tap shareholders for more funds.
It’s worth noting that Ormonde is seeing tangible progress, with access to the primary body of ore at its main asset expected in the coming months. It is, however, unusual in that regard. Not just among this group, but among all of the small Irish exploration companies.
Perhaps shareholders are so excited by the promises of gold and oil that they are happy to allow their money to be slowly chipped away at in the pursuit of a rich find. Of course, it is the nature of this particular beast to be optimistic. And while there may well be gold in them thar hills, investors might well run out of confidence before it can be found.
