Business Development

I pop into this thread every now and then to check if management have woken from the slumber and perhaps done something other than collect the Area C cheque. Even checked their recent presentation to confirm if they are still planning to do some business development one day.

They reference the following:

• Under "What we offer" they state: Patient and disciplined approach to value accretive M&A
• Continued investment in business development

Considering that they have been listed for almost 18 months now, they are stretching the meaning of the word "patient" somewhat. Looking at the Income Statement and the latest 6 months of expenditures, they are burning $8M a year to run a small office and collect the cheques. They are spending only 10% of this on Business Development so will be very surprised if they actually do any deals any time soon. If I were a large shareholder I would be pressing them a lot more to understand what they are actually doing on the B&D front and if there are in fact any opportunities out there that fit their criteria. Other royalty companies have done large bulk materials deals in the last 18 months so there must come a point when all this "patience and discipline" corporate speak will start sounding pretty hollow.

I personally would prefer if they gave up spending money on any BD (and cut those extremely high salaries and expenses) so that you could simply buy low cost Area C exposure. Based on the Dec 1/2 Year Report shareholders are effectively paying a 4.5% fee to management to facilitate cash management so they will be very keen to keep this gig going. Perhaps it is time to dust off the CV to try and land a job at one of the highest paid & lowest stress companies in Perth.