It's good to see some new and enthusiastic posters here. No doubt you're impressed with recent SP gains however, you should know the SP hasn't yet returned to where it was before an extremely poorly managed situation caused the price to crash and, therefore, imo there are still a lot more positive gains still to be made from these levels.
The quarterly report in July made it clear the company was burning cash and running out of money.
Then with no funding update from mgmt, the ASX issued a "5B" notice on Aug 2nd officially asking if the company had sufficient funds to continue operations!
At the time the SP was around $0.20. Not surprisingly the ASX query was followed by heavy and sustained selling.
So what did the Board do to reassure share holders/the market?
Nothing until Dec 16 (ASX ann: "funding update") some four and a half months later by which time the share price had crashed to 8c as the market was expecting and pricing in an onmarket raise at a considerable discount to the SP. This wiped out $75,000,000, or over 50% of the market cap!
Can you believe it?
We have had various calls from extremely angry share holders voicing their anger at management who have been accused of being "unbelievably lazy and/or incompetent"; "a disgrace" and what ever the case, "in dereliction if their fiduciary duties to shareholders".
A common refrain was how could it possibly take any responsible board with a resource as good as Walford Creek another four and a half months after the ASX notification to address serious funding concerns particularly as the delay wiped out half the value of the company?
We feel particularly sorry for people who sold in despair as the situation should never have happened imo. Unfortunately, there are a few people out there who are absolutely filled with rage, having lost a lot of money and are determined that there are consequences for those involved.
Also of interest during this time was that a new substantial share holder "Back 9 Nominees (P. Averill)" became visible with the ASX '603' notice on 16/12/19.
The 603 witnesses them buying strongly from mid August right through to the funding announcement on Dec 16.
We imagine that they must have been confident that funding wasn't an issue and, again, we certainly feel for any shareholders who sold during this 4 & 1/2 month period for what were clearly artificially and unjustifiably low prices.
Had this debacle had not occurred, the big Walford Creek Resource Upgrade announced on Dec 17 should have substantially increased prices from the base of around $0.20 not from below $0.10 as actually happened.
So once again, imo there is a lot further for this to run especially considering the market cap is still only a couple of per cent of the value of the proven metal in the ground....
Also, while the PFS really shouldn't take yet another 6 months to complete, we are hopeful that when finally done, a realistic valuation for this excellent resource will lead to a significant re-rating on the market.
AML Price at posting:
18.5¢ Sentiment: Buy Disclosure: Held
