Phew! What an unhappy bunch!!! Let's look at a few facts -
1) the SPP closes on 7 May. Their Quarterly report has to hit the market on or before 30 April - halfway through the SPP period. If the report is good, price goes up, shareholders who took up the SPP benefit.
2) I've participated in the CTO SPPs since 2002 and haven't lost money yet. I invested $2,500 on my credit card each time: Date Investment Price Shares May-02 $2,500 6.0 41,667 Dec-02 $2,500 7.5 33,333 Jul-03 $2,500 12.0 20,833 Mar-04 $2,500 18.0 13,889 Jul-04 $2,500 12.0 20,833 Feb-05 $2,500 12.5 20,000 Sep-05 $2,500 12.5 20,000 Total $17,500 170,556
Current Value $0.40 $68,222
My $17,500 is now worth $68,222 - 290% return on investment. I'm happy with that!!
3) You have to sink money into a gold mine before it produces anything - I suspect that while current cash flow is breakeven, they are still paying off the last couple of months bills. According to the last Quarterly, they spend $1M a month, so they wil be short about $2M, which the SPP should cover.
4) Given that they needed money, how would you rather see that raised? A private placement where we the small holders miss out, or an opportunity to allow small holders to participate at 38.5c (with the free shares) and then be rewarded when the price goes to 50c. The floor under the price is 40c, the fair value at present is around 41c (10 Moz at $25 per ounce gives market cap of $250M which is around where it sits), but the Directors don't get their options until the price exceeds 50c, which is an obvious target for them.
Recognise an opportunity here, not a negative!
I'm in for the full $5,000 this time! It will probably be the last SPP now that cash flow has started.
CTO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
