Hi everybody,
I want to give an update. Recently I have made a few posts here about the consolidation and I want to make sure that I do not sway the vote for or against in a way that is out of proportion to my holding. I also want to stress that everybody DYOR. I do not say this in a flippant way. I take this very seriously. I have been watching Morningstar Mine for a very long time, back from the MCO days. I started buying AUL in February this year when it was announced that production would start soon. I have bought since then as well. I think it is very important to get information anyway that you can. I read reports, read reports from similar companies, talk to directors, worker, locals, shareholders, geologists, study the area. If a person has a lot of information and it is correct information then you have a lot better chance of buying the right stock and not selling on emotion. A bit about myself I live in Warburton (two hours drive from woods Point) I have 7,641,000 shares. This is 90% of my share holdings. I am very well aware that you are not supposed to have a large portion in a small start up but I have done my research and I am 95% confident that AUL will take off in a very big way. But again please DYOR
I always try not to write too much or say anything that I should not say but I think that with the current state of things for this post I might error on the side of saying too much.
Regarding the consolidation at first I was for it 100% I knew ahead of time (and not from a board member) when the announcement came out I thought "that is great, they are ticking another box" But then after reading everyone's posts then I became very worried. Everybody has written about previous experiences of consolidation. I knew that is was a risk but with everybody so against it I thought this might be bad. I am very familiar with the CTL situation up the road. where a perfectly good mine gets totally stuffed up my the management.
So many mum and dad investors totally screwed. I was warned to stay away from that one but I still feel sorry for the investors.
Last night Philip Amery (AUL board member) came to see me in Warburton on his way back from Woods Point. I had tried to contact him earlier in the week but he was not able to see me until last night as he was in Woods Point.
Here is our conversation:
He told me about his stay He was up at 5am which I know is normal for him. He went to the workers morning briefing, management meeting, then he was signing up some long term contracts for casual staff. The next bit he did not say but I have heard it before) With mining workers often fly in and out they easily go from mine to mine. AUL is now in production and they want to stabilize the work force. When they have a good worker they want to keep them.
Now back to our conversion: He then went with others and they looked over eight old mine sites. (These eight are the ones that are priority. You can read about it in an earlier ASX release) He was telling me in particular about Dempsey. It is between ROD and Hunts. The previous company did drilling and had very impressive results ( am withholding the amount) (You can ask Philip this if you like.)
Then at night he traveled back to his home He would have gotten home very late. I can personally assure you that Philip is really putting in the hard yards. I know that many times in real life someone will write a report and give it to a director to sign and the director will just sign it without ever reading it. I can assure everyone of you that Philip is not that kind of a person. He is very hands on, and working very hard. He is trying to turn this company around. MMN / AUL has been going from project to project for many years without making a profit and doing CR after CR. Philip is serious about turning the company around.
He says that we might be in profit this month. He said that there is no immediate need for a CR
(I think that from reading the June update we can all do the math and know that so far there is not a profit) he is not saying that July will be a profit, but that it might) Anyway I think that AUL is doing a very good job at getting an old historic mine running again. If they can do it with MS and ROD then it gives me great confidence that they can do it with other local mines
At the same time he gave me a list of upgrades that we can do such as a pre crusher so that the rock entering the mill would be smaller and easier to process. They could also process the large rock that they currently are not able to process. There is the possibility of acquiring the A1 mine. (ASX release) So at the moment there is no immediate need for a CR but there are many possible projects that we could do a CR for.
This next bit he did not say: At the moment things at A1 are in quite a mess but when the court case is over there is the possibility of acquiring a very good mine and with it being very close to MS this could be a very good strategy. IMO this might be worth a CR
IMO I feel that we (AUL) should stay focused on the Woods Point (which AUL is doing) and get into profit and then use the profit to expand but that acquiring the A1 might be worth getting if the price is right) IMO if AUL wants to do a CR I think that there should be good consolation with the large shareholders so that they can have their say.
Back to our conversation:
We talked about the consolation. He gave me his reasons why, mainly that large institutional investors will not look at a stock if the price is too small. I totally agree with that. I mentioned that the big fear that everybody has it that if there is a consolidation that the price will go down and then there will be a large CR and then we will all be diluted. He reassured my that if there is a CR that there will be a Share Purchase Plan. Philip reassured me that if there is a CR that I and all other Shareholders will have the opportunity to participate and maintain our percentage of the company. This has been my biggest fear. I am very confident that AUL will succeed. I just want to make sure that I am in when the going gets good.
We talked about capping. He said that the "capper" is a shareholder in London who has gotten impatient with the SP and wants to sell. He said that the Australian broker has to load up the shares everyday and then take them off at night. He said that it is a very dumb way to sell.
For me personally I feel much better about the consolation knowing that if there is a CR I can participate. I have not yet voted and I have not yet decided. I am really curious to know what Mcnally thinks. He has the most to lose or gain. He probably knows the most. I asked Philip and he said that he can speak for himself. I asked 03Boz and he said that he did not know.
So regarding what is best I am not sure. Maybe yes, maybe no, maybe a comprise?
Regarding the Monday meeting Philip said that he would come. I was hoping that he could come but I could only talk to him last night. After all he is a shareholder. If anyone came come please come whether you are for or against the consolation. This is your chance to talk directly to a director. You can ask him as many questions as you like. He will have the chance to give his reason for. We can all talk and debate the pros and cons. We can then all be better informed and make our own decisions.
Regarding a spill, I am not for a spill for the sake of a spill. A spill is very disruptive and a distraction to the real work. Philip is honestly putting in the hard yards. He really does put in the extra work. I do not know the other directors or know how much they put in.
I think that overall the best outcome of this situation where so many shareholders are upset is to have better communication between the BOD and shareholders. I know that the ASX has rules about what can be said but I think that if there was a bit of a formal way where shareholders and especially large ones like McNally and 03Boz and others could interact with the board so that we are informed about major projects and we could ask questions and the board could get feedback that would be good. It is our company AUL is a small company and they are very approachable. I think let's all work together. Directors, management, employees and shareholders we all have different roles but we are all the same company. One of us can not succeed without the others.
If AUL succeeds then we all succeed.
If as many us us can come, come, and we all have our say and ask questions and then make a post we can help the others who are farther away to be better informed.
See you all Monday
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