Firstly, keeping the operation small isn’t a defence against a cheap takeover or share price manipulation. In fact, the main reason they’ve kept drilling is to avoid the situation of selling a world class resource very early and cheaply, then sitting back and watching as it develops into a monster asset for someone else.
Secondly, agree that maximising earnings per share is the aim BUT too early to tell if the path chosen isn’t the right one to achieve that goal. You need to adjust that statement to read ‘maximise EPS given the RISKS at hand’.
Thirdly, EPS (or, more accurately potential EPS) isn’t always reflected in the share price in the short run. It takes time and the right sentiment for that to happen.
Lastly, WAF is not alone in not having responded to a higher Gold price. Take a look at DCN, GOR, RSG. Compare their share prices around August last year, when POG touched the US$1160s, to their share prices today. POG is up $160, RSG’s forecast margins over AISC have pretty much doubled as the share price has fallen. Incredible, but also understandable given the execution risks they are facing. Potential EPS and the share price are living in different universes over at RSG. At WAF we are dealing with Sovereign risk and have dealt with the Financing risk. This is over and above the Execution risk of building a mine from scratch.
IMO, you’re being unjustifiably tough on WAF Management at this time.
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