Couldn’t agree more mate with most of your post (more on that later). We saw us hold ground this week, when the rest of the market went significantly backwards today - not only did we hold price, but we had some additional shares added at 4c this afternoon making a slighter bigger level of support.....we have definitely come of age, and as you stated, we have re-rated since we got the MMP approval announcement. It feels like we are primed for some upward movement, but we really need a positive announcement next week (or the week after at the latest). I am secretly hoping that the naff gold announcement this week was the filler to get us through to next week to allow for the spring board that we have developed not to be eroded. We saw this with AVZ this week, they announced the lack of the approval from the FIRB after hours last Friday, and then as the market was set to punish the stock on open on Monday (was tracking to lose 15-20%), they announced a trading halt to prevent the bleeding which allowed them to get more announcements out to counteract the negative sentiment....it was absolute genius. There is the chance that a complete coincidence exists in that they managed to be advised of positive news over the weekend after they were advised of the removal of an investment based on the FIRB decision, but I have learned to question these kind of amazing occurrences.....as most investigators would say - there is no such thing as a coincidence. I am hoping CXO’s announcement on the gold prospect was as much of an amazing “coincidence”, but the fact remains that they happened to uncover this information at a convenient time when we needed a bit of propping, but more likely it was sitting on the shelf, and they figured this week was a good time to use it......either way, it had a not negative effect on the share price (I wont say positive, but definitely not negative). If we get a cracker in the next few weeks, it will truely be an exciting time for CXO - we could very well move at odds to the rest of the market and see some prices not observed for sometime - i might even get my head above water. Let see, but I am hopeful if not borderline excited.
Back to the part where I might disagree a little. Yep, Yahua might be looking for a bit more product based on your shared post, but I’m not sure in the current environment that we should give it to them. The future could be very different compared to the past because of COVID-19, and especially because of the where the current squabbles between Australia (and potentially other developed nations) and China end up - committing to more of our product being sent to China may not be the smartest business decision right now. I am thinking that it is time to start diversifying our customer base as we have no idea on where the political conflict will end up (is it possible that the FIRB denial of AVZ is the first shot for the industry?). Given that we are likely to see an advance in nationalism post COVID-19 (we saw the start of it with the US prior to the current crisis), we might find some decent funding sources right here in Australia (great to see CXO exploring these), and some good supply options within developed nations. This would assist us to get balanced demand from multiple sources. I am not suggesting for a minute that we should ditch Yahua, they have stuck by us and we should honour this commitment, but we should also definitely assess what we do in the future to protect our position. We have a great product, cheap production costs, and a great location, and we should be looking to capitalise on this.
It is excellent to see some more consistent communications coming from the CXO team, both in the form of announcements and social media - was even good to see SB conducting some interviews from home (even if the quality wasn’t great, but that is the state of our NBN at the moment, and not likely his fault). He could be sitting at home doing nothing, but he is not.
One final point, as has been stated this week from the quarterly, it is great that we won’t need a CR this quarter and probably not until later in the year. By then hopefully we have some good investment options that prevent the need for it, and if not, then with any luck, the SP is much higher to keep dilution to a minimum.
CXO Price at posting:
4.0¢ Sentiment: Buy Disclosure: Held
