I remember in April, thinking it a bit strange that they reiterated their 100,000 oz guidance for CY2022, when in fact they did not have a reserve for that quantity clearly defined.
It seemed strange to me, because when I looked at the resource, and required earth moving, and limited drilling, I thought it might have been prudent to be a little more conservative and estimate about 50,000 oz.
To me, that would have been a good effort to start with for the first year of production, while doing more drilling, to perhaps outline an underground resource.
I remember talking to my neighbor about this (over the fence) at the time, and just shrugging, and assuming that oh well .... I'm sure they know what they are doing, and they know what they have.
FFX management were very enthusiastic at the EGM, and I liked them very much, and still do. Perhaps their over enthusiasm got the better of them. It's very difficult to tread the middle path, and not be too- optimistic, when the whole industry seems to be craving big positive news releases, one after the other. It's like a drug for shareholder addictions that you keep obliged to re-filling.
Unfortunately, I think they'll have to scale back their ambitions in the short to medium term, which might involve laying off some workers at Morila, perhaps temporarily, which may also result in demonstrations at the plant by the local communities, similar to what they did in March. I'd assess that this is the reason why the two lady non-executive directors did not want to take part.
Mike was very good, and very friendly to me, and I wish him well, and thank him for his efforts. He did get caught up in the over-enthusiasm and high expectations, which caused personal stress. No-one deserves abuse from a shareholder at an AGM. Next year they should erect a sign at the AGM, "abusive bullies are not welcome (and nor are dickheads)".
Because of the shareholder base this stock has, I think it requires a very stolid dominant personality to lead it, someone like Vladimir Putin perhaps, someone a bit more dour and conservative, with a (very) thick skin, who's not afraid to call some shareholders out for the fcukwits that they are, and then have a wry grin about it.
I think the company will be ok in the long term, once expectations are tempered and become more realistic.
I think they'll do the right thing, and announce on Monday that the estimate for production for the CY 2022 is 50,000 oz, and that some production circuits may be temporarily halted, and some staff temporarily furloughed, while they undertake a small capital raising for more cash which will be directed at drilling (and drilling) in order to re-categorize resources to the measured category, before going ahead and mining that category of resource.
I think this is a very sensible and prudent thing to do.
Short term pain perhaps, for longer term gain.
Gw
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