I bought in February at 8c using the cash backing argument. I...

I bought in February at 8c using the cash backing argument. I was so pleased with the purchase, I put a post on another forum, which I'll quote here:

"From the last quarterly cash flow report:

http://www.asx.com.au/asxpdf/20130131/pdf/42crwbbrzv25nz.pdf

Cash at end of quarter $12.7m after net spend $0.7m and before $1.1m projected spend this quarter.

At current SP ($0.08), MC only $8m. So if you had $8m lying around you could buy this company, sack everyone, and pocket a cool $4m.

Plus from their quarterly activities report:

http://www.asx.com.au/asxpdf/20130129/pdf/42cmv4gp0rvflf.pdf

There are some tenements and exploration results you could flog as well!"

But my logic was false. Nine months later, they are still trading below cash value, but they have less cash, so I am sitting on a loss.

The cash backing argument is bullshit, unless you personally have enough cash to buy the company, flog the assets and bank the cash. A company which has cash balances but has failed over the years to turn them into a positive cash flow, is worthless to a small investor.

As for the current strategy, it's just a poison pill. Do you seriously believe the miniscule cash balances of this little company are enough to turn any resource into a mine? I admire your loyalty to a former colleague or boss, but you are dreaming.

Why do I hang on? It's a long shot, but if there is an upturn before this one closes its doors, maybe some other company will buy them out and enable me to cover my costs. To be honest, I was hoping somethng like that might happen when I bought the shares. In other markets (London, New York) they would be a classic take over target. But this is a funny market - I don't fully understand it. But here's to hoping anyway.