A lack of buyers means the devil and the deep blue sea beckons for BRL's share price.
How on earth you can manage to get the market obviously contemptuous of a buyback is beyond me, but Tacon and Middleton have managed to do just that! By buying on an "on again off again", the market now is suspicious of their very willingness, or worse, ability, to buy back shares. Do they have the cash? Or maybe they don't? Will they get sucked into that Canada project cash calls? Are they trying to stock pile cash before the Supreme Court knocks them for a six? They can't even cough up a few million dollars to buy back shares...does that mean shit is hitting the fan in their operations right now? We sure get radio silence on any of these questions.
And mind you, we are not talking a lot of cash spent on buy backs. We are talking...like a few million dollars worth of cash spent so far? Isn't that supposed to be not even a month's cash flow? I mean is that all they can muster to support the very barometer of their incompetence? I thought the first half cash flow generated was a shocker. The market seems to be suggesting that the second half is not much better.
Plus, somehow not even knowing that Talley's had bought 100 million shares, until they had been "made aware"? Wow...that sure calls for tremendous confidence from Talley's on BRL management!
And frankly, I doubt they care. They have enough balls in the air to keep the CEO standard of living going strong. I mean imagine...jetting off to Canada once in a while to inspect their little project, paying themselves "performance bonuses" and congratulating themselves for such a brilliant job done, that they need to reward themselves with ever more shares? They even had the gall to claim such great performance in their AGM recommendations.
Of course I am sure Tacon & Middleton will defend their buyback actions as trying "not moving the market" etc. kind of crap. If you are doing a buy back, it would be an idiot who does not believe that a buy back is anything but.
Meanwhile, the degree of obfuscation on their operations remains shocking. At least in the past, they told us proudly how they were "reducing risk at every level"...code for hedging at US$180 as it was "super high prices", and unlikely to last. Well...it has not gone below $180 for so many months, that you have to wonder what kind of coking coal market awareness they really have? Incidentally, I asked Dan Clifford at SMR about his hedging activity...and he said "zero hedging @SMR". No such pretensions about him being smarter than the market in a commodity market. Sure...I can already hear some readers say they are fine with that...but that is easily US$10 million of profits gone in 1 year of such foolish hedging. Even for them to do a far bigger buyback. By the way, they have stopped telling us ANYTHING about their hedging brilliance. All we now get is "price received"! What that means is smoke and mirrors. Which price is that...the benchmark off which we get 80%? Or the price we get after the 6% royalty, and the 80% of the benchmark? No explanation of course. They sure manage to put one foot after another into their mouth, don't they?
It is also disturbing that a major shareholder "Asian Dragon Acquisition" fund let go of 100 million shares at 13 cents. Is that all those investors thought the value of the company was...3 x cash flow? And I don't buy the claim on this board that Talley's has grand plans. I see it as purely opportunistic. Unless shown otherwise, by another action of Talley's.
Good luck to all of us shareholders. I think the worst is yet to come. This remains a derisory management. Every action speaks louder and louder of their incompetence. They should be fired. Maybe that will get the market soaring. Dan Clifford @SMR sure seems far better than these clowns we have.
BRL Price at posting:
13.5¢ Sentiment: Sell Disclosure: Held
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