Hi daning, the odds are that they may reach production with Marcus at the helm. But it's still not absolutely certain by a long stretch. However I don't think that's becoming the real problem. The real problem is the amount of dilution we are seeing with such little progress. They've basically just been paying for administrative costs and some limited drilling programs up to now. The expensive items (not included in Capex costs) are still to come. At what price will future capital raising be at in a jittery market and how many more shares will be required to reach production? That's becoming the real issue (problem). As mentioned in my last post, they could easily surpass a billion shares on issue at this burn rate to reach production. Perhaps many more unless something presents itself out of the blue such as outstanding drilling results from Juruena ( Borborema is drilled out). Or some great news from CAS's lithium assets. Unless something like that happens I can only see sub ten cent trading.
Incidentally, my average in CAS is 30 cents, so I hope I'm wrong. I hope these current posts make me look like a fool a year from now.
Hypothetical time. Let's pretend they issue 1.2 billion shares by the time they reach production (which isn't certain). At 8 cents a share it gives you a MC of $96M which is probably fair value at that point. That's your problem. Where's your risk to reward for future investors if CAS management are hell bent on diluting shareholders to oblivion?
Look at the number of shares on issue over the past few years and you'll see how serious this is. If you chart it, it would look like an exponential chart (Y=X2)
I don't blame Marcus. As mentioned, the damage was done with virtually nothing done over the last three years. Only limited drilling programs were carried out. Most of the money and subsequent capital raisings during the last few years were needed for administration costs only.
CAS Price at posting:
6.5¢ Sentiment: Hold Disclosure: Held
