I must say, it was good to unplug from the forums over the weekend, but now that we're back into the fray, let's talk!
@ABhan123, I must say that I do sympathize with you. It is natural in the short term movements to think that FFX is part of the P&D that we see ever so often, but it is very important to look at the slightly bigger picture here. This time last year, to the T, the SP was $0.098, not even 10c. And within
1 year, thanks to the outstanding management of Michael, Alistair, Andrew and team, the SP (right now) is at $0.47, so you can rest assured that the company is being helmed by a solid set of operators.
Hopefully you've done your own due diligence, but just as a quick recap for you, these operators, have set the bar for what it means to have strong relationships with stakeholders at
every level.
1)
Investor relations - You have to agree that unlike many junior goldies out there, their communication is second to none. The news flow has been
constant. In just
this month alone, aside from quotation for securities, Appendix updates, I count
SEVEN news releases. In May, I count
TEN news releases.
FIVE in April... Need I say more? Some companies you hear nothing for several months! On top of that, many shareholders will be able to testify that the very same head honchos are very quick to respond to emails and questions and and top of that, they have a strong social media engagement also in partnership with Investability who have been very solid at updating everyone in quick info nuggets.
Do they have to update us about every tiny detail on progress? Nope. However, I reckon they have gone above and beyond in terms of the material updates.
2)
Workforce/Community Relations (boots-on-the-ground in Mali) - If you've seen the report, this company has 99% of its workforce sourced locally, with only 4 expats out of 583 workers. They could have flown in Aussies but they chose to employ almost everyone locally. That suggests to me that in terms of wages and local taxes, they are keen in strengthening community relationships and the very positive recent video interview with the Minister of Mining and Finance is testament to that. From a CSR (corporate social responsibility) perspective, that is a huge tick. Over the next 10 years, its something like
US$895m that is going to flow into Mali via taxes, royalties, wages and local procurement.
From an
ESG investing perspective, this is where the Morila project takes the cake. Obviously, the pit has a lot of water. They could have chosen to pump it and dump it elsewhere (haha, sorry, I had to.), but they chose to use the water as a resource for the local communities' agricultural operations. Fun fact.. did you know that at the Morila area, there is a thriving agribusiness community? There is a fish farm producing about 60,000 tilapia fry every quarter, there are also poultry, fruit, beekeeping and livestock businesses as well?
Now in terms of
growth, there is no other company right now, that has an opportunity like FFX where you buy one share and will receive a pro-rata amount in the subsidiary's upcoming spin-off. I don't have to harp on about the mineral resource and the ever-increasing rate of production of gold in Morila, nor the fact that Goulamina is DFS ready, shovel ready, permit ready, fully funded, to produce about 446,000 tonnes of spodumene concentrate per annum for China's biggest lithium player who supply BMW, CATL, Tesla, etc etc.. and we all already know the EV outlook for the next 5-10 years already. Forecasts for spodumene prices over the next 5 years put it at about US$700-$800 a tonne of concentrate. Morgan Stanley reckon that it will hit about US$1000/tonne of concentrate, so you do the math
just for Goulamina.
Sentiment is fleeting. But all these other metrics will speak for themselves, and the company SH will, in time, re-rate appropriately. Once the bigger boys start to realise the sheer scale of the resource in Morila and Goulamina, you'll very quickly see the price float up to the 80s and 90s where it should be, right before the demerger.
