"But there are also clear markers in our sharprice history where the market has spoken and immediately following management decisions, announcements, the price has dropped. This is not a one off, this is a pattern. Management need to take responsibility for what they have done, not how hard they worked to do it."What drives the SP up in the short term is not necessarily what is best in the medium term. Eg. accelerating production by 1 year, by cancelling all other exploration and studies. People like nice short timelines (and the SP may rise), but we'd end up with a big problem to solve later if actually wanting to develop the rest of the under-explored project (and the plant design simply not matching the resources later found).
"So easily looks like using precious shareholder funds to invest in yet another unrelated company where the payoff is uncertain. Why not do the work and get the cash so we can invest in our project? (I think I know the answer, but it doesnt change the fact we have $1m less cash to spend on developing what I actually invested in and they got the benefit of not investing cash in their own project) If we wanted to invest in a Coal company we would ask management to do so."Uncertain, yes. But it's not that different to exploration. You spend millions on exploration as a gamble, which pays off or doesn't. You help a coal project to improve their odds of development - the potential payoff being not only equity, but a boost to the Estelle project's development potential.
If it would not be useful to Estelle, then it would be frustrating having investments made into random projects. But it sounds reasonable to me. 'Work' maybe cheaper than 'cash' too, doing some
work for them using excess staff capacity, potentially costing us $500k but charging at $1m.
It might have a third benefit -
having one more better-developed project in the immediate area gives further justification for the road to exist. Benefits:
- Equity.
- Non-cash investment.
- Potential power source.
- Helping the government to better justify the road.
There's probably some synergies out there. Eg. how we share an airstrip with USGold. Other experience and resources may be able to be shared too, for mutual benefit.
An example scenario: we help them to accelerate their project by 6 months, and it doesn't cost us much (charged at $1m, but costing less). The project then has more progress for AIDEA to show off while progressing the road, and only 20 miles from Estelle.
Actually, I think I've located it and it's 34 miles. Still less than the 110 miles to Anchorage.
The access road documents mention it (
https://dot.alaska.gov/roadstoresources/assets/WSSARS/WestSusitna_TAR_w_Appendix.pdf):
(20min delay)