Well it's all happening in min sand land atm. Can be years of no news, no interest but sleepy hollow is ll the rage. My hat is off to Luke Graham, he has played an average hand like a world poker champion.I played around with STA stock around the single digits but was always a bit so so Coburn because of the grade, though astounding improvements in recovery made a big difference. Still, like Gunson Resources before the name change, getting large min sand projects funded for development is difficult to impossible generally.
I watched STA share price race up to high-20s and stay there on the continuous news flow of DFS upgrades, NAIF funding and well placed rumours of JV investment interest. Then he managed to get a huge lick of equity in a surprise heavily discounted CR and bingo, stand alone development was secured.
A few long suffering might have been bit peeved that brokers and sophisticated clients swan in at the last minute and get set cheap, but unfortunately that is often what it takes. Importantly, LG had a sense of timing and luck also required in min sands, where the window of opportunity is often only open a couple years per decade. Locked in capex contracts just before cost inflation hit WA, while riding up the price inflation of Coburn's min sand products. Min sands prices got better, Tanzania now wants to play ball (though still on onerous terms with residual sovereign risk) and STA continues to outperform as construction closes in on completion all this you know.
Today's AFR article about a $50M raise after share price rose from 35c to 50c in two weeks post analyst visit to Coburn looks classic Graham doesn;t it. A virtuoso performance of market and media savvy, driving the price up 40% without anyone (me anyway) thinking more about it than the Coburn roadshow must have gone down a treat and STA are sitting pretty for production into a high product price market. STA was all over the media, happy days, then whack... $50M CR at the top (and $50M is still no small raise in my mind). That is how you run a developer if a number of people I'm thinking of are watching.
I'm wondering now, is it really all for Tanzania, Coburn expansion, or is some of it for Coburn capex increases not yet seen the light of day? If it is genuinely for Coburn expansion before the construction is even complete and the DFS never considered a Stage 2, then hat tip again. Strategically audacious, tactically brilliant, and shareholders can hardly complain at the price his filled the kitty with $50M at. Sigh, where was LG when SFX needed a sharper mind?
GLTAH
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