The ASX 300 rebalance was announced 03 March and took effect 20 March ... it's over. 5EA remained in the ASX 300. Next rebalance for the ASX 300 does not take place until September. However, there should be a few catalysts to turn the share price around before then, all going well:
- Commissioning complete late Q1/early Q2 per JT's statement in the Proactive interview and press release (21 Dec 22).
- Initial boric acid production early Q2 (press release 21 Dec 22).
- New CEO will be in place 24 April.
- Initial lithium production late Q2 (press release 21 Dec 22).
- Revised Construction Schedule TBA in the coming months for 5E Boron Americas (Fort Cady) Large-Scale Complex with revised CAPEX/OPEX and funding details to be provided to the market.
- US Government funding TBA.
The selloff has been vicious, but it has largely been driven by shorts on the NASDAQ, where on some days late last year, more than half the turnover was short selling. This has been caused by lack of liquidity in the US, and not necessarily with any fundamental shortcomings with company strategy, or execution. Add to this the current sentiment towards pre-production companies with no near-term income expectations and this is the result you get. I'm sure I'm not alone in holding a number of other companies in somewhat similar circumstances, largely due risk-off and a focus on value in the market. We should not lose sight of these significant market factors IMHO, which go some way to explaining what is happening here.
Nor should we lose sight of the fact that 5EA traded up to a high of $3.84 on 06 Jun 22 ... only a relatively short 9+ months ago. Things can turn around again relatively quickly, if management can achieve some favourable outcomes over the coming year.
Yes, management have most certainly kicked a few 'own goals' with a number of undesirable resignations from key positions helping to create the perfect storm. However, having said that, when talking with AH and other execs on occasion over the past 6 months, most of these were legitimate departures, although poorly timed in the circumstances. On the other hand, management have continued to build out the SSBF with only minimal delays, and what I see as acceptable cost increases in the inflationary environment we are operating in.
Our new CEO (Ms. Susan Brennan) should be given the opportunity to take charge of the company and demonstrate the characteristics and potential the board identified when they appointed her. No matter what some of you may think, we have an experienced and accomplished Board of Directors who I believe have taken account of the strengths and weaknesses of the various candidates, and then selected the most suitable for the role. Some of the unsubstantiated scuttlebut that's been written on this forum in the past week has been truly disgusting and completely unwarranted ... particularly when you have self-confessed shorters with clear agendas aiming to fuel the selling with as much misinformation as possible. I hope we can all give the new CEO the benefit of the doubt at this point, and let her get on with building the company to achieve its true potential.
I certainly share the pain most holders of 5EA are experiencing with the current share price, but I still believe 5E has a very promising future and will eventually achieve its stated objectives. I don't see any way to turn things around in the very near term, other than by doing what all successful companies do ... plan effectively to cover all contingencies, then execute to a high standard, and the rest will follow. The project has a unique and abundant resource, is fully permitted, and is adequately funded for this stage of development. So hopefully we should see things slowly turn around and improve in the coming months, especially once some of the catalysts mentioned above are triggered.
All IMHO ... good luck to all holders.
