I don't think there's any doubt about the fundamentals. And I certainly agree that patience will be rewarded sooner or later (appearing to be later at the moment).
The drilling is clearly adding value to the business, however with the share price where it is at the moment a buyback will also add significant proportional value to remaining shares (ie. buying back under, say 70 cents for a share easily worth over $1.20 is a good investment of funds).
My suggestion was to wait 6 months before the company considers capital management options as a way of improving SP. The idea touted would not really limit the drilling of AMU given that my thoughts are to put $10 million into capital management (assuming the share price remains stubbornly low). Noting that we are all expecting current cash flow of at least $45 million per annum (before Schwing or any other success post January) against annualised drilling of say $33 million (double half year). In short, they could afford both if they wanted to.
At the end of the day, a positive directional share price can start to feed itself, in much the way that a falling one can discourage newcomers. I actually think that within 6 months the SP should be reasonably above where it is now. If it is not, however, it would be so cheap that a share buyback would make compelling sense for the company from almost any perspective.
MJS
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