Drilling is the key here. YRR must get Gabinintha up to measured resource status asap to attracted potential investors, otherwise any potential j/v partner will demand too much of the project for their outlay.
Look at this article and take note of the size and grade of the deposit compared to YRR
Further still, YRR is wanting holders to give them the potential to issue up to 25% of the current amount of shares on issue without holders knowing beforehand what the dilution is for. I will vote no to the additional 10% prior approval resolution at the upcoming agm.
YRR are at all time lows and I would be concerned that the board will either issue shares at 75% of the market price to sophs or others who haven't had to endure the depressed sp. If it was done via a spp to all current holders then the dilution isn't so bad for those willing to take the risk. YRR could then get someone to underwrite the spp and only take up any surplus shares after current holders have first taken their pro-rata option and any shortfall.
Even worse than being diluted by a capital raising is the acquisition of any more tenements which will dilute holders not only through having 25% more shares on issue for more unknown and dubiously valued ground (think YRR circa 2007) but we also lose 25% of our vanadium and uranium Jorced projects by virtue of the dilution. And still this doesn't resolve the issue of working capital which is barely enough for 3 more quarters of limping along as we are now.
How would we fund the capital requirement for any further tenement exploration when nothing is currently being achieved with the advanced projects we have. Already money that should've been directed to Gabinintha vanadium has been spread across the gold/copper exploration which is at best a grass roots project with unkown potential.
We hear of trips to Chins etc by management but not of any outcomes. All the spruiking by certain posters here amount to no more than white noise. Around $2.5m spent since the control of YRR changed hands about 21 months ago without 1 drill hole anywhere. That's around 300m new shares at 75-80% of today's sp. What have we got to show for it?
So-called 500-800mt Fe potential, copper/gold potential, maybe other mineral potential.
Notice something about the last sentence above? The word potential. For those who were around when YRR was diluted by about 70% in 2007, that's what we were being sold back then and it all amounted to nothing other than the sp going from 75c to where it is now.
We have a uranium project which successive boards have failed to progress. Either j/v or sell it. Selling would be the best option as it negates the need for any cheap capital raising.
We have a world class vanadium project which CSA Global recommended further drilling back in Feb 2011 to lift the resource to measured category amongst of things. We had $3.4m in the bank at the time and could've undertaken drilling which would've made Gabinintha more attactive to potential j/v partners but management seems to have tinkered around the edges instead of having a red hot go.
The sp is where it is for a reason and it's not just a depressed market. The market will embrace companies that show they have good projects and management who can make it happen. The market will spurn companies who have poor leadership as it knows that the strength of the management team will usually be the greatest deciding factor as to the success of the company. No asset is valuable if it is not progressed. A potentially great racehorse will never realise its potential if the trainer is a mug. And so it is with small resource companies.
YRR has 1 very good project and a uranium deposit that sits close by year after year without any signs of being progressed. Now management is looking at gold and copper. So far I think they have grossly under achieved and judging by the sp, so does the market. If they keep heading in the current direction it would appear they are getting further away from ever getting any project into development. Let's hope they don't repeat history here and acquire more ground with 'potential' but without the means to explore it.
I look at the sp and think YRR is very undervalued. But then I think of what's going on and the uncertainty surrounding future funding and what the intention of management is regarding YRR's direction and I can't bring myself to buy even at the current price. The flipside is that it will only take one good announcement to have me wishing I had bought as many as I could whilst they were so cheap.
Just my opinion as a shareholder looking on from the sidelines. Please feel free to refute anything written here.
AVL Price at posting:
0.9¢ Sentiment: None Disclosure: Held
(20min delay)