What is LOM worth?

There seems to be endless discussion regarding the share price and whether it is being manipulated in some way. The price has declined from around 60 cents in the middle of last year to around 40 cents by the end of the year. It has since declined slowly to its current levels. Yes, there have been some positive announcements such as the Mining License, diamond finds, diamond sales and executive appointments - but no long term share strength has been achieved.

I guess for institutional investors the figures do not make good reading. Since 2006 net profits have totalled $ - 25.7m. It has generated $ -22.2m in cashflow!

During the same period it invested $36.126m, but did not pay out any dividends.

It paid out a further $5.19m in "other" cash and foreign exchange.

Combined this equates to a funding gap of $63.568m. So how do you fund this gap;
* capital raising which dilutes shareholder value - not good for the share price
* borrowings - as above
* or use available cash (which they do not have without the above)

During this period LOM has raised equity capital of $65.446m.

All of this information does not mean LOM is a basket case as most explorers/miners tend to start out life this way. You need to raise the capital to begin your operation, if you do not find what you are looking for you go and ask for more money.

It has been discussed ad nauseam on these threads as to whether management know what they are doing from those with absolute total loyal blind faith to those who appear to be on here for no good reason other than to stir the pot. I can also understand the moderators frustration as I see little of this bickering on other threads.

My thought is that management have a reasonably conservative plan in place whereby they are not splashing around the cash recklessly. However the next 12 months or so will make or break this company. Consistent, positive cashflow is imperative and it needs to be achieved sooner rather than later. The alluvial mining allows the company a chance to achieve this aim.

When (and if) this is achieved on a consistent basis the more sophisticated investor will jump on board. At the moment the shareholding is littered with small investors interspersed with the traders that are in and out from day to day. Is there manipulation? Probably not, just people taking advantage of an investor base that are anxious. Let's face it, most people are probably sitting on a loss or breakeven at best. Added to this everyone has targets, be they profit related, stop losses or conversely a lack of patience when other opportunities present themselves sot they exit early.

Of course the icing on the cake is finding the source of the diamonds and there are a million and one theories on this subject as well, from those highly qualified in this field and by those (like me) who are not and just hope! My theory is that the alluvial diamonds come from somewhere (not really rocket science is it!) it is just a matter of time. The downside is how much time. I tend to work on probabilities........
It could be tomorrow - not very probable
It could be next month - quite unlikely
It could be in the next 12 months - possible
It could be years away - more probable
It could be never - end of dream......

I do not mean to paint a glum picture but the share price is unlikely to go anywhere until some very positive and consistent progress is made. Hopefully the next 12 months will determine the companies future and answer all of our questions.

Cheers and the Best of Luck at All.