well i read though the last financials and I can see why OZL management are being very careful with cash on hand....
they have taken the very conservative road
c1 costs have blown out for the reason stated in the report....and cannot be sustained for too long a period.....
as i stated a long time back when the price was $1.60 and they announced a return of capital + a dividend and a 1 for 10 reconstruction ...all of this was going to be a major mistake....
cash should have been preserved to well over 1.5 Billion....
global economy has slowed...and in line with this expenditures have to be slowed ..as do dividends.....
like it or not they are in a bind like so many other companies....they have to preserve cash.....
after all no one wants to see ozl returning to the debt laden days of oxiana.....
its not a directors job to make sure the share price stays up...its his and the boards responsibility to strengthen and insulate the company from any more global disruptions and any more unknown taxes that Labor may dream up......
the share price is pitiful......and there are shorters in the market daily
as at 14/08/2012 asic reported total shorts 6,950,029 or 2.29%
on 1/7/10 asic shorts were 19,583,757 or 2.73% pre 1 for 10 consolidation (shares on issue 3,121,339,730)
on 1/9/2011 asic shorts were 6,568,553 or 2% (share on issue 323,877,514)
30/11/2011 asic shorts were 9,579,202 or 3% (shares issued 316,690,008)
15/03/2012 asic shorts were 7,514,698 or 2.40% (shares issued 313,266,898)
1/06/2012 asic shorts were 5,334,288 or 1.72% (shares issued 308,785.193 )
6/07/2012 asic shorts were 6,189,460 or 2.04% (shares issued 303,959,874 )
17/7/2012 asic shorts were 6,722,588 or 2.21% (shares issued 303,959,847 )
30/07/2012 asic shorts were 7,679,769 or 2.53% (shares on issue 303,920,022 )
3/08/2012 asic shorts were 7,296,325 or 2.40% (shares issued 303,920,022 )
13/08/2012 asic shorts were 7,258,573 or 2.39% (shares issued 303,470,022 )
14/08/2012 asic shorts were 6,950,029 or 2.29% (shares issued 303,470,022 )
overall one can see there has been minimal movement in shorting positions but this still has a serious affect on the downward trend as they stock is illiquid.....
small parcels being traded make big differences in this instance......
the buy and sell sides are small especially when compared to the pre consolidation period......
basically this stock is now easily manipulated with any entity holding a few hundred thousand shares......
day shorters have an open field with virtually no opposition.......
as previously stated management will work at running the company but they will not focus on the share price......
some of the acquisitions they contemplated were just plain stupid...esp in any area that part of the former U.S.S.R.......their legal system is a shambles,a sham and at anytime when a development looks like it is profitable they can move in and nationalise ...or introduce higher taxes etc....they are NOT safe place for OZL to invest in.......
its bad enough in Australia where gillard promised that should would not introduce a Carbon tax during her first term of office.....
and that in a low sovereign risk country ..invest in some of these other countries and you risk losing 100% of any investment...they are corrupt and politically unstable...then throw in the terrorist elements......
at this juncture cash preservation and returning the balance sheet to the $1 billion mark are a priority whilst continuing to advance the Australian project so that they are ready for the global recovery......
The likes of BHP and RIO have made cash preservation moves and rio has made an investment in SAFE Canada ....BHP has halted Olympic Dam expansion........
Some of this is a boycott in response to the Gillard carbon Tax
Some other BIG projects in Australia are continuing..they were already committed....no way out.....
other are advancing in the hope that by the time they become operation that Gillard and and labor will be voted out and that the CARBON TAX WILL BE REPEALED.
good luck to all .....but i'll just sit this one out for now ..to see where it goes.....
I still believe this is a good company long term...but it will be a waiting game.....
regards
al1
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