I have been buying CMR shares over the past 12 months to average down my initial holding on the basis I considered CMR would come good in the end.
Having waded through the recent paperwork for the EGM I too am concerned CMR has not released all the information it should to enable shareholders to make an informed decision before voting. I realize there maybe few/no other financing options at present but do not think this is sufficient reason for not giving as much information as possible. We all know how frugal CMR has been in the past about keeping shareholders fully informed despite our hopes being raised for a short while in mid 2008. My current thinking is:
1. IMO the NED’s have let shareholders down badly and should do the decent thing and resign. CMR's change since the May 2008 AGM is a shocker. As a qualified accountant IMO cash management and planning has been woeful.
2. CMR should comment on the likelihood of whether further shares will need to be issued over the next 12 months. Whilst this depends in part on commodity prices CMR should state clearly what prices copper, cobalt and nickel have to fall below before further capital is required (or like PNA say what their net cash costs per lb and budgeted production are). Otherwise for existing shareholders this will be death by a 1000 cuts with a continual drip feed of new share issues and hence new sp lows.
3. CMR need to state that if the EGM resolutions are approved their current forecasts show no further cash will be required ie all funding is in place until CMR becomes cash flow positive. Also to state which month/quarter they are budgeting to become cash flow positive.
4. I do not agree with DMR that the ‘share price valuation methodology’ should be used solely. It is generally agreed that mining companies big and small are currently not being valued by ‘normal’ methods. With CMR’s continual lack of information announcements means the market cannot properly value the shares and hence has no option but to downvalue. They also state normal control premiums are in the range 25-35% but a few paragraphs later say CHG should only pay a 20-25% premium. DMR/CMR should explain this discrepancy.
5. Bearing in mind the increasing number of shares being issued to Cornell should they not have to state whether they intend to keep the shares or sell them. At least that would stop the are they/aren’t they selling that does affect the share price. Why didn’t Cornell issue a substantial shareholder notice when they received 8,658,630 shares on 12 December as this was more than 5% of the 144M shares in issue?
6. Rather telling, in hindsight, how CMR has put no broker reports on it’s website since mid 2007.
WE NEED TO KNOW FROM CMR WITH CASH AND SHARE ISSUES THIS IS IT.
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