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manny100

5,695 Posts.

2499

30/06/22

07:13

Post #: 62285488
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Originally posted by Karl89: ↑

here’s a couple of my random thoughts…

•obviously shocked and unexpected MA departure, the other two leave leaves me scratching my head further. I’ll be looking to the remaining directors to stay onboard. Another drop off would not be pleasant.
but director reshuffle aside and with more of a focus on our production / guidance:

•last quarter we mined 10.8k oz through predominately viper. Activities this quarter were to include both n’toils and the super pit. There is no reason to believe viper did not deliver a steady source of ore and even if the super pit proves to have been a Largely a failure for this quarter, there is a legitimate case for this to be our best quarter to date >13koz.

• cap raise. Cash burn was high last quarter. While missed guidance this quarter doesn’t really play havoc with future gains, I’d say it’s going to hurt the bank in the short term. Whilst it doesn’t appear our cash would last till cash flow positive production, I couldn’t think of a better time for this project to take on debt.
That said, I do remember previously they have said terms have been unfavourable and perhaps the reason they didn’t go down the debt path… though this has me thinking perhaps it was more related with a higher raise share price (whilst still merged with LLL) and perhaps projections showing cash would not make it the full distance to cash flow positive production. A cap raise is easier to stomach with a debt free company than a company needing to raise with a maxed out facility.
They would know their timelines…. If a debt facility of say $50m only gets us to the end of the year, smart play would be to raise cash… which would obviously hurt short term. This all depends on if this cash flow positive production is actually possible early 2023… we really need management to step up and show their cards now. There’s a time to hold them close and a time to let us see if there is a shorter term ace in there or if expectations need to be managed with a longer term view required.

•cap drilling. Cap drill continue to hold FFX and haven’t shown any particular see down. Where josh loves to speak of “smart money” exiting earlier in the year, cap drill have no greater insight yet seem to have decided to hold. I can’t believe they would have continued to hold if the drilling was not showing positive results. They already have fixed contracts with FFX/LLL and are not an investment company, no reason to hold if they didn’t want to.

• life of mine plan currently shows an 8 year life of mine that, to date, resulted in a cash flow positive operation q1 2023. I don’t think the question with the company was if there was gold in the ground or if it would become a successful operation… it was more just around when.
Execution risk was emphasised as a key focus… and while perhaps it seems it’s perhaps not been perfect, longer term I still believe it will show reward… just when do we see that reward? I thought q3 was the turning point? Perhaps it still is? I will wait for this announcement before deciding.

• updated life of mine…. We have been extremely patient on this front. Extremely patient. They have been saying we would be getting a steady stream of results since start of 2022 which seems to have been fairly light on thus far. They have said they have 7rigs(granted approx 2 could be over goulamina) drilling essentially 24/7.
To my knowledge, our new lab is still under construction / almost complete which will help, however with results at the current lab / at town, there should be some updates even with a backlodge. Have been happy for this point to be a back thought as This is not an exploration company and results more importantly adding to LOM2 and large scale drill plans… though it would be fairly crushing to see a cap raise before the LOM2 is released. I’ve still got high hopes for LOM2 and believe it will prove to be substantial.

•The bizarre thing is the recent media updates MA did in which he which would have had you believe we were on target. I note here he also did state the plant is running correctly. I’m more incline to believe a shortfall of output over issues at the plant itself.

•in closing, shocked is an understatement. As others have said, shorts were onto it. I could understand how there could be shorts holding through the demerger even with the weak market due to particularly LLL upside risk. But they nailed it. This has turned fairly disappointing on what was going well. That said, we still don’t have all the facts and anyone here who actually knows how this will all play out is kidding themselves.

•LOM2 ASAP please!

Expand

The gold is still there. It apoears from media speculation that the issue is delays in digging and processing Morila. The delays will affect projected cash flow leading to a raise to see the business through to higher production and cash flow.
The question is when did the BOD become aware of the delays? Before or after pricing the spin off? At this time i am assuming after. Did MA know and when?
The drill results and new LOM are hopefully good and provide some comfort to holders who will need it after a raise is required.
I am confident medium and long term but dilution will sffect our long term returns on a per share basis.
With the LOM/reserves etc ann due soon maybe monday? Drilling at Morila will be cut back/slashed as will exploration. The LOM ann is a seperate issue to delays processing Morila ore.
No doubt they will slash costs temporally to reduce the size of a raise. They may just do a placement which would be easy given the safety net of the new LOM ann and 20% LLL holding.

FFX Price at posting: 20.0¢ Sentiment: Buy Disclosure: Held
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