cash and recievables $312m ...mc $200m , page-20

Thank you for the reply Sellier and thank you very much for discussing it with Mr Sage. Much appreciated.

Nice to hear Lady Annie sale on track. I was confident it would be completed but not certain, so that's great news.

Re: fire sale - yes, that is how I see it at the moment and will continue to hold. What I can't understand is, if it is that logical, why don't people with large amounts of money buy into it? I assume people aren't idiots, especially people with large amounts of money. If there is that much value in the company, surely somebody would have capitalised on it by now enough for the SP not to contiually languish so far below cash backing?

Finally, it would be great if what you say eventuates, a share buyback from the sale of Marampa for 70c to drive the price over $1.

However, why purchase something for 70c that's available at 35-40c currently? Assuming the Lady Annie and Marampa sale do go through, it would be far more beneficial to capitalise on current market weakness and buy shares now at much cheaper prices if funds are available. It would be paying half the price for something by purchasing it a year earlier.

To oversimplify the matter: 100 M shares at 70c costs $70M. 100M shares at 40c costs $40M. That's a $30M saving, or 75%, by capitalising on current weakness as opposed to waiting. Even a $10M buyback, if possible at these prices, would add great value to the shares.

Secondly, this is stating the obvious but I am not sure a couple of people understand share buyback at lower than cash backing is not only about driving the SP up, but also adding value to existing shares as each would be worth a greater proportion of the cash.

For example, oversimplified once again:

1 share in a company with a market cap of $200M, cash backing of $400M and 400M shares could be sold for 200M/400M = 50c.

Its value however would be $400M/400M shares = $1.

Now if you used $100 million to buy shares in its own compay the figures would change to:

1 share with a market cap of ?, cash backing of $300M and 400M shares - (bought shares of 100M/50c = 200M) = 200M.

The share value has risen now to $300M/200M shares = $1.5
from $1, an increase of 50% for no real change in the company.

Obviously, this situation is not practicable, it is oversimplified for the purpose of explanation, but the principle remains the same for any situation you can purchase shares for less than cash backing.

Apologies if this reply is rude in any way or stating the obvious to most of you already aware of it, I'm just attempting to understand why this isn't or can't be done or errors in my own logic. TBH personally I am becoming frustrated with the SP. I think CFE has done a great job but has been undervalued for so long.

Thanks again for the replies Sellier.