Absolutely on point ......
My opinion only:
On the Recapitalisation Package holders/posters were blinded by emotions (their post certainly suggested so) without taking the time to add rationality to their thought processes,
~ an anger fuelled by "Firefinch being fully funded to cash flow positive"
~ intensified by the redundancy payment to Anderson
~ another briquette thrown on the flames with roadshows and interviews leading up to the trading halt as being fully funded to being cash positive.
~ fanned by a deal for ME-IM being offered copious amounts of shares to eliminate aged debt but also any forward debt commitments, and a position on the board. ME-IM, the same contractors that the company cited as underperforming and in breech of their corporate contract in providing mining services and partially responsible for the debacle. To the point the company were going to initiate some sort of legal proceedings against them?
To get to the "postface" you have to read the book
I get the anger though, VanEck would be annoyed, they issued a "Becoming a Substantial Holder" notice (
9:31am 27/6) and some 5 minutes later, the Company requested the Trading Halt (
9:36am 27/6) it was for the full year (2022) production guidance to be withdrawn and an update to production performance. Which is never a good position to be put in, but none the less, it wasn't and won't be the last time a company withdraws production guidance but most companies work through the issues that contributed to missing guidance figures.
Not FFX though,
the chain of events that immediately followed was (for me) somewhat surprising:
~ the resignation of the 2 new directors (
10:01am 28/6) without so much as a boo to any reasons why!
~ suspension from Official Quotation (
9:26am 29/6) -- pending the reason cited in the Trading Halt.
~ Firefinch Executive changes (
10:46am 29/6)
** by Mutual Agreement, Anderson left, with rage being directed at his termination payment of $450,000. With most seeing it as inappropriate given what had happened, but Employment Contract Termination clauses have to be honoured.
** Taplin was also elevated to Acting Chief Executive Officer.
Still being none the wiser,
~ (
8:07am 4/7) Ceasing to be a Substantial Holders notice (ceased on the 29/6) from State Street Corporation, as they returned borrowed shares.
~ (
9:35am 4/7) the Company requests a Continuation of Voluntary Suspension, but this was now referring to "Proposed Funding"
~ (
10:10am 4/7)
Operational Update we were all waiting for ........
**After a couple of pages of blurb, we had A38.8M cash, US$3.6M of shipped dore waiting payment, US$4.4M overdraft facility and (at the time) A$124m in LLL shares, to then get to the page with "all these cost pressures" have resulted in a need to enter potential financial measures to address the Company's current working capital position.
At the same time the Company is putting out the Operational Update, the are working behind the scenes to deliver;;
The knock out punch .............
~ (
9:04am 5/7) Announcement of the Sale of 28.6M LLL shares, to inject $12.9M cash!
**A substantial loss of $7.1M in a 13 day period from LLL being admitted to quotation.
** I honestly believe that the ASX and ASIC should be actively working to change/add components into the Listing Rules and the Corporations Act to add more protection for shareholders from IMO a Board and/or Management that make illogical, poor and reactive decisions that impacts and decimates shareholder wealth.
** I also believe, that the ASX should include into the listing rules that before decisions are made to divest or partially divest a secondary asset (LLL shares) that could have a material impact on the shareholders wealth, (these actions will also flow onto the Corporate image of the company) that shareholder approval should be sought for the (in this instance) the sale of LLL shares -- at the time there was no urgency for the cash injection! And with the gift of hindsight, there was no reason (full stop) to sell them.
~ (
7:18pm 11/7) Cowden resigned, again I will harp back to my theory that there was some sort of split/disagreement in the ranks of the Board over the sale of the LLL shares based on observations of:
(1) Cowden reiterating that the ore body has not underperformed but it was the poor ramp up of production, so why would he resign and leave his "Jundee" opportunity.
(2) The sale of the LLL shares notice was released by the secretary, this in itself isn't unusual but the fact that it was not approved for release by the board infers to me that the board wasn't unanimous in the decision??
~ did Cowden resign before the board voted to remove him?
~ did he resign on the bidding of large shareholders?
Postface:The Recapitalisation Package, doesn't need anymore commentary on the merits or lack of merits, it didn't happen.
As Gareth has pointed out, "bird in the hand" thingy but more to the point, reap what you sow!!
@abu simply said, it will be the only white night for FFX .........
Was it shareholder revolt, or did the board actually make the decision based on POG and AUD?
~~ going by what Michael Weir said, it was the wishes of the majority of shareholders, ambiguous at best -- we can assume it wasn't the majority of the number of shareholders (of which there is 8,883) - so a majority of the amount of callers Weir received from shareholders that could be bothered?
**
did the current board and management make decisions on the basis of a pr man relating random shareholders wishes back to the them??
++ how many shareholders? what holdings did they have? did he verify they were indeed shareholders?
-- I thought that is what a general meeting and voting on resolutions were for?
Without taking away that everyone is completely different, their circumstances are completely different and their cost basis point when purchasing shares in FFX are completely different from one shareholder to the next.
But, when voicing your anger, and while indicating you would vote no for the $0.06 funding agreement (I'm saying agreement, as I believe it was a done deal)
~ did you also consider (not aimed at anyone) the in-specie LLL shares you received and the ATO ruling on the treatment of your Firefinch shares cost basis?
**those two components do not take away from any overall loses you are currently enduring as a result of purchasing Firefinch Limited shares, but it does (IMO) soften the extent of those loses?
What does have me intrigued, was the mob focus on Firefinch's Leo Lithium escrowed shares, the very same shares that were destined to be a part of the war chest for M & A activity, and/or working capital top ups to avoid credit raises? and they were never going to be returned back to the shareholders.
Obsessed with the impact of the possible SOI and the value dilution of LLL shares per FFX share was a common theme, and I don't particularly disagree with those sentiments.
@john_utah another post that nailed it, re: "
Absolute misdirection with this IMO:" Although it is pretty common that Companies do include events subsequent to period end and Interim Financials are no exception, but saying that I agree that this is rubbish that the 1/2 yearly Account had to be re-assessed on the back of the Company's 3rd of November announcement. Re-assessing accounts that should have been released to the market 6 months ago (if they had of be keeping up with their Corporate Governance, there wouldn't have been anything to re-assess!)
Considering, the Company and PWC are also compiling the Yearly Financial accounts in unison.
There has been a lack of narrative and/or theories as to what it is that has them backtracking?
re: This has included a re-assessment of the work already completed on the June 30, 2022 financial statements due to the announcement the Company made to the market on 3 November 2022, titles 'Morila Gold Project Recapitalisation Update.'
~ what am I missing in that announcement?
~ what if the 1/2 year financials had been submitted on time, how could they re-assess them again? withdraw them or issue a correction?
My opinion/concerns:
~ This is going to drag on, and will be a distraction to the Company with their "strategic review" due by the end of March.
~ Fees for PwC for the period ending 31st December 2021, which would have been both the 1/2 Yearly and Full Yearly accounts were $329,605 for normal auditing, 31/2 months of this specialised audit is going to cost a pretty penny, and that is not inclusive of the "Firefinch Financial Team" whoever that is?
++ certainly hope it isn't any of the current directors utilising their skillsets.
Goodness knows what the consultancy contract with the General Manager of Finance (Harris) will be/is.
~ although the Company has indicated that the issues with Morila will not have an impact on Firefinch Limited, the Firefinch specific auditing being problematic will be a hindrance to the "strategic review" and any prospective suitors.
Lowe has thrown out a carrot or two, re: cash capital retuned back as soon as possible if there is no suitable outcome to the review, with the amount of consultants being engaged for financial, auditing and the strategic review itself, I doubt there will be much left overs for us mere shareholders by the time this is all done.
~ I also doubt that any shareholders will see any or part of the escrowed LLL shares returned either!
cheers
