I have owned the Medusa shares after they announced the dividend around March 2021. I bought more on the way down, and now my avg price is about 0.75. I bought the shares since I wanted some exposure to an unhedged gold mining stock, and the yield was a nice kicker. So I was getting paid to wait for gold prices to move, sounds good to me. I do not worth "for with" Welker, whatever that means. I am a private investor who likes deep value stocks, ergo the name. I also own JMS and NCZ, but X64 is my largest position.
As for the deal with Welker, I was pretty surprised that the company swapped an asset of unclear value for 10% of the shares. I was also quite upset at the cancellation of the Feb 2022 divvy. Even the recently announced divvy was quite odd. 99% of companies announce divvies WITH the result, not DURING the trading session a few weeks after results. I don't think the company is being run that well, so I'm in favour of a shake up.
As for CAPEX, I agree that the company should complete its Tigerway decline project, but the company has no business "acquiring other cheap assets" when its share price is as depressed as it is. A basic tenet of corporate finance is that you should acquire things that trade cheaper than your own valuation. I have looked at 50+ gold mining stocks, none are remotely as cheap as X64. It's not even close. This company trades more or less at the value of its cash and gold, its as if the market is giving zero value to our ongoing operations in Phils.
I'm suggesting that the company prioritise buybacks, but also continue the dividends and complete the Tigerway project. But I think it would be lunacy to try to acquire anything when your stock is a net-net. The buyback probably won't even cost that much. Over the last month the company has traded 3.8m shares at 0.588 AUD, thats 2.2m AUD or $1.4m USD of trading volume over the last 30 days. Doesn't the Phils mine make about $3m USD per month?? Even if the company could buyback 1/2 of the trading volume, which it couldn't, the buyback is a small outlay relative to the cash generation in Philippines, and it's a tiny outlay relative to the cash in the bank. The company needs to learn how to walk and chew gum at the same time, this means they need to be able to multitask. They also need to apply steady and consistent policies. This Board has had ample time to prove their worth, and the share price tells us that they have failed.
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