page 13 The Capital structure shows that the top 20 shareholders hold 26.67%
Presuming the date of the top 20 was the same or close to the report, being 23/10/12 then what has happened within the top 20? Have we had major selling down by institutions post ann of this deal? or has BDO got their numbers wrong? I say this as from the annual report we wre told that as of 11/10/12 the top 20 held 44.71%
page 18 "Gold prices are forecast to fall over the next three years to approximately US$1400 per ounce in 2016"
Whate ever happened to the mantra, "Aggressively Expanding into a Rising Gold Price"
Infact what even happened to the Chairmans own comments in his letter to shareholders of "...an expectation by the company that we would see a rising gold price going forward"
page 33 Laverton operations valued at 54million
Why the hell did we just pay 130million for it!!!
Treasure island only valued at 3.08million
This place cost us around 3million, not to mention the additional dollars we have pumped into the ground... AND whatever happened to it being elephant country?? Surely its worth more than 3million!
page 42 FML enterprise value is 182million, our EV/resource multiple is $47 per ounce. We hold 3.89million ounces.
From the peer list comparison they conclude a median value (excluding Regis) of $80 per ounce, from that our enterprise value would be 311 million, a whopping 75% above our current enterprise value!!
now the "expert" says he believes this is due to our weak cash position, but I ask are we really worth 75% less??
page 43 QMP method values us at a low of 5c, high of 5.9cents and preferred at 5.5cents per share.
"So why does our board tell us this offer is at a premium? The offer is low ball at the 5cent mark, we were sold the offer as being a 13.6% premium to last closing price and 28% premium to the 60day vwap, however the offer is low ball at a 10% discount to the independent experts prefered value!!
How about our board asks for a 28% premium to preferred value ie around 7cents per share?? That would bring it up to around the mark that we long suffering yet supportive shareholders stumped up not all that long ago!
page 45 "If the Placement is approved then Shandong Gold will hold an interest of 51% in Focus on a fully diluted basis.
In addition to this, Shandong Gold will nominate three persons to be directors of Focus, which will take effect once the Placement is complete.
When shareholders are required to approve an issue that relates to a company there are two types of approval levels. These are general resolutions and special resolutions. A general resolution requires 50% of shares to be voted in favour to approve a matter and a special resolution required 75% of shares on issue to be voted in favour to approve a matter. If the Placement is approved then Shandong Gold will be able to block special resolutions and general resolutions and will have the ability to pass general resolutions. Focus’ board currently comprises four directors. With the appointment of three nominees from Shandong Gold to the Focus Board upon completion of the Placement, this will increase the Focus board to seven directors. This means that Shandong Gold nominated directors will make up 43% of the Focus board.
Shandong Gold will obtain control of Focus upon approval of the Placement. Therefore, in our opinion, Shandong Gold will be able to significantly influence the activities of Focus and as such should be expected to pay a similar premium for control as if it were acquiring 100% of Focus"
I'm not sure however that some current shareholders have thoroughly thought through what that means.
But I do believe the "expert" hit the nail on the head.
However they stopped short of stating that infact Shandong are NOT paying a premium.
That is why imo the report does not state that the offer is in the best interest of shareholders. It merely states its fair and reasonable.
imo There is a BIG BIG difference
Davo
FML Price at posting:
3.7¢ Sentiment: None Disclosure: Held
(20min delay)