I think this was a mistake by Smyth...a serious mistake.
The "process" appears to need volume, buyers, investors, believers...TRADERS...and plenty who read the announcements and think they see a chance to make money.
In one fell swoop, the defeat of the bonus options has turned about 130m votes (probably the bulk of the retail spread) against the Company and no doubt, countless others via contagion going forward.
This will not be helped any by a near unanimous HotCopper based negative camp.
From this point forward, every effort from CVI to convey the story via the ASX will be met with an overwhelming negative response...certainly from the majority of retail holders...and the bottom line of this clearly will be limited if any buyers!
So, how are any of these new shareholders going to make money if they are the only buyers of the stock?
Fine if they really want to own the actual assets as they will buy them for a song, but will they do something with them if they do...do they want to spend $4-8m progressing assets with their own money, in the current subdued period of the commodity cycle?
Given the Company has been going at this "renewed effort" in relation to their resource assets for about two years...and not a single result has come from Catabola (drilling starting Oct 07?), or CDB, in fact nothing measurable in real asset based value adding "activity" from any of the Company's projects...as such, I would strongly suggest it APPEARS they would prefer NOT to actually progress any of their projects in real terms.
If this is the case, clearly the new shareholders are NOT buying to own the assets...or progress them...surely?
One can "accumulate assets" via paper shuffling, prepare the ground for future activity, etc, for only so long...at some point you need to either put up or shut up. I mu view, we have missed the resources boom "opportunity" to package up and sell-off a decent portfolio for decent money...this was my original attraction here...now all we have left are potential resources at at such an early stage that, in the current commodity downturn, they are arguably only good for mothballing till things pick up.
If they were perhaps more advanced, one could argue they were worth progressing.
Don't get me wrong, there is significant value here with their Copper/Gold based resources in particular...when the period of low US$ based global hyperinflation kicks in perhaps just a few years from now (maybe less?), and gold and commodities respond accordingly (rise significantly - gold has started)...but for now, not a lot to excite the retail market.
I do feel this is the best chance to add significant value to the stock by the way, as opposed to more paper shuffling based asset acquisition via hyper-dilution.
Real discoveries add value very cheaply...and this is possible at Catabola and even CDB...lol, imagine a nice gold intersection at Catabola right now (very possible)...but they will need to actually start working, employing an active drilling programme!
So, in the absence of any real activity on the ground, it would appear the only way for these new larger holders (who more or less now own the majority of the Company now), to make any decent money here, would be via selling into the smaller retail block of ever hopeful buyers, predominantly on the back of announcement driven excitement?
In the current market, this is a very big ask...lol...even more so now they have put most of their potential target audience off-side via the EGM farce, specifically via the voting down of the options.
This also gives the media a real feel for what actually went on and will be extremely damaging going forward.
They may be crafty, even masters at corporate chess, but this one simple act shows...at least on this occasion...CVI acted with emotion and not the usual clinical disregard. In my view, they have put offside their "tickets out of here"...and will wonder why future efforts via ASX correspondence will incite limited if any market response...lol...other than via their own buying of course.
In fact, they have virtually guaranteed a hostile audience now to all future correspondence.
Angry, you might be right about the options being "back on the agenda" at the "next meeting"...between then and now however, they will have no chance of net selling via the usual games, at least not in the volumes they will clearly need.
By the way...just one change of substantial shareholders notice showing these new holders are selling, will be the permanent end of any pump and dump exercise.
They really do need to get the market back on side for what I suspect they ultimately intend here...so the quicker they announce something to "fix" the options debacle, the better.
Interestingly, the "vote" against the bonus options clearly explains the increased selling of CVIO's in the lead up to the EGM, which I have to say were trading in the direct opposite of what one would expect...clearly someone knew the vote would be defeated. If only we could see the options register and see who was selling...and how they knew?
Yes, I hold options by the way...lol...all bought with my own money on market!
Cheers!
CVI Price at posting:
1.6¢ Sentiment: None Disclosure: Held
