Here we are again, sitting on $0.003 with no near-term...

Here we are again, sitting on $0.003 with no near-term milestone, no binding agreement, no financial closure, and nothing that will send this to the moon within the foreseeable future. To be honest, I never thought we’d be back here, surely not after signing so many ‘binding’ agreements with Indian behemoths. But here we are . . . nothing but pessimism on the threads, nothing but stock dumps, and nothing but rock bottom prices.

To be honest, I’m not all that upset with the position, and for those that are interested, I have held all the way through the India effort, I know how frustrating it has been. But why not upset?

This is an opportunity in my eyes. Since 2014 I have been looking through the lens of hindsight, thinking how good it would have been if I just backed this and loaded up. Back at those levels, I could have gained option-like exposure, just without the maturity-extending ELF. But no, I was cautious and really didn’t know where the company could go from there. If only I could get a second chance to make the most of the opportunity . . . oh wait, here we are again.

Taking exposure at these levels isn’t an easy thing to do. Everyone is calling the ‘last rattle’, those that bought at 12 months highs are taking what’s left a heading for the door, and what’s worse is copping a pip move down – that could be 33% intra-day loss!!

However, the way I look at it is like this.

The one thing I’ve learnt in the 9 + years of following ECT is that those who lose on this stock, which is most might I add, are those who buy into the hype. Unsurprisingly, this hype is highly correlated with high prices (relative to historical), the worst time you want to be buying a spec stock that has a real potential for falling through on its aspirations. So, if that’s not the time to buy, now must be the time. Prices are low and hype non-existent.

While it’s all very well going contrarian on this one, there has to be something that gives an indication for potential, something that ultimately underpins expectations for future performance. For me, this is found in the company’s position; management; and how many steps we’ve taken back, relative to how many taken forward in the Indian deal.

Quickly on the company’s position – while notionally, we actually have operating rev on the balance sheet. Would be interested if anyone could tell me the last time this happened. Combine this with the cashflow-positive strategic plan – I think we’re going to feel a pulse for some time yet.

In terms of management – People are often highly critical of management which in my opinion isn’t completely fair. If we were to attribute the failings of the company to date, I don’t think management would be the ones to blame. Furthermore, we sit here and count the failings, however has anyone sat down and counted the opportunities that management have raised. This is the key for me, management has displayed resilience, which indicates that there will be another opportunity. As long as the company is a going concern (i.e. cash flow positive) and there are opportunities, we’ll get across the line (IMO).

Finally the India deal – how many steps back vs how many forward. The best way to think about this is to consider the ALDP. While steps back weren’t completely equal to steps forward, they weren’t far off. In other words, once we got the bad news, it was almost back to square one. I say with conviction that this is not the case in India. NLC were always better to deal with compared to NMDC, and I’d expect that once a replacement to NMDC has been secured, the tripartite will be alive once again. Does anyone think we will be looking at a $0.003 price once that happens . . .

Anyway, these are my thoughts and this is all in my opinion – enjoy your week!