As I've said, they will need to come up with alternative strategies now, it was fairly obvious, even before the SPP.
I think the management made a mistake by bowing to the demands of the Funds, without realizing what the funds might do. They discounted the SPP far too heavily, probably being told by the funds that it's the only price they can raise money from their Sophs at. The Sophs then put in $4.5m, while at the same time both the Funds and the Sophs knew the discount was so huge (which they'd talked the company into), that they Shorted the hell out of the stock as well (you can win on the up and the down).
The Sophs and Funds can't lose, and once momentum is to the downside through Shorting, it collapses way below the SPP price, which is what they want. They have no regard for the company, and no morality other than greed. They will come in with even more Shorts now and probably sink it down to about 3.5 cents or whatever level they set their Algorithm to, and then cover the Short, raise it up to just above 6.6 cents, and then sell and get their SPP money back, while making All their profits on the Shorts.
A Classic Sting !!!
This is just One (1) reason of many-many why Shorting should not be permitted on any share market, the loopholes for corruption and company destruction are immense !!!
The company now needs to strategize.
And they have a few options, but are limited by the rising costs of production and exploration, and inflation, but also by market sentiment.
I'd be interested to hear from other shareholders here, what (serious) solutions they might suggest.
Selling a project or two is one option, which to me is a good one, because I think for a company of this size they have spread themselves way too thin, it was reasonably obvious in this market, and especially if you look into the company history. Too many Greenfields projects over too many years, too much air core without any serious follow-up substance, especially in Victoria, and after listing for 15 years, they practically have nothing to show for the Victorian exploration, not one (1) ounce of gold produced after 15 years.
My impression (rightly or wrongly) is that a couple of management people here have been living off this stock for 15 years, because it's close to their home, which makes it a kind of easy lifestyle stock.
Half an hour after I issue a post saying we have not heard the results of the SPP, or how much the directors purchased, we get the announcement - of course, it could be a co-incidence.
Fifteen (15) years of drilling air holes in Victoria, and almost nothing to show for it, not a single ounce of gold produced - surely somebody has to answer for this, because shareholders have been funding someone's lifestyle, paying off someone's mortgage, and paying for someone's car and holidays and superannuation for all this period.
Look at the company history, it was incorporated in 2007 and listed in 2011.
Where is the accountability?
Isn't it time for some people here to wake up?
The other option is to attempt a spin-out with a free in-specie distribution, at least rewarding longer term shareholders with something for all their money and patience over the years, and this might be the moral thing to do. Spin out Mt Carlton and the JV into a small gold production company, so that any additional future exploration costs from Victoria don't weigh it down.
Then the people who like treating this thing as a local lifestyle plaything in Victoria for 15 years can continue drilling their little holes here and there in Victoria and near Stawell until the cows come home, without dragging down some management and shareholders who (may) see greater ambition and success in the gold "production" space in Queensland.
Personally, I think they need to separate the operations so that the poor history of Victorian exploration over 15 years does not drag down the new production hub in Queensland. At the same time, I think they need a board and consultancy refresh, there (may) have been a few people here for far too long, acting initially in both executive and non-executive roles, and then as consultants via their own company. These consultants need to go, let them have their Victorian assets back and they can play with them for another 15 years until retirement if they wish.
So, is the company leadership going to act, are they going to do the right thing by shareholders?
We will soon learn.
Because these are the difficult questions, and these are the difficult times, when company people with foresight and vision and strength-of-character, step forth and show their true colours !!!
Gw
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