Most of the Ex & present FFX Directors are also Directors of other companies - except for MA.
Directorships are lucrative & sought after, the last thing any of these Directors would want is to be banned by ASIC. So it is totally in their self interest to ensure FFX comes out of this f^*%up, and becomes successful. Also some of these Directors have significant amounts of their own money invested in FFX. AC with 9m & BB with 12m shares. The last thing they want is for their reputations to be tarnished with a failure.
How much did they know? that remains to be seen, I spoke to several of them at the AGM/GM end of May and all seemed fine. Two Directors bought shares on June 6 at 35c. They thought there was value then so were obviously unaware of what was about to unfold. From memory I think they said the COO was in Mali at the time of the AGM/GM so should have had 1st hand reports on what was happening on the ground.
So it’s fair to say the Directors saw things going wrong some time from June 6 (when Directors bought) to the June 19 weekly report, allegedly shown to them on June 24-26. Up until then, behind schedule but recoverable.
The asx has only asked about the production guidance not the costs/burn. Probably because there was no guidance on cash burn other than to say they expected to be cashflow positive next year. When the Directors bought on June 6 you’d think they’d be aware of the finances - probably the most important thing in running any business. I can only assume the MD + CFO were asleep at the wheel, possibly preoccupied with the demerger?
In any case they did what was required, suspended the shares (which other wise would have been at the mercy of shorters etc), implemented immediate cost saving measures and are looking at a different mine plan to get to being cashflow positive asap, I assume being less ambitious with their timetable.
There are a lot of doomsday posts here, some say we’re low grade so unviable which is complete rubbish. WAF a very successful miner bought Kiaka which has 220mt @ 0.9 g/t. Our 1.6g/t reserve is very respectable for open pit mining. Yes you see 4g/t but that is usually associated with more expensive underground mines. You certainly don’t go underground for Kiaka’s 0.9 or our 1.6. With our Reserves, any half decent operator should be able to make it work.
Ozblue does raise some good points, though I disagree with his prognosis. IMO we just don’t have enough information to come to some of his conclusions. What he is basically saying is that Morila was never viable whereas those with all the information and I presume eminently more qualified than ozblue thought it was economic. The (ex)Directors (many with mining qualifications) have all the information yet they have bought on market since the Morila acquisition. All Gold mines have strip ratios, Tietto one of our W African peers also has a strip ratio of 6:1 their DFS showed a NPV of roughly $1b at an $1800 gold price. Their Reserve is graded at 1.3g/t compared to our 1.6g/t.
It’s also not like we’re out of cash, we had $41m equivalent June 30, sold Leo shares for $13m & received $8.3m from Leo in July with more to come. Then of course we have our 17.6% holding in Leo, although it’s illiquid, I fully expect that to be worth well north of $500m when Leo gets closer to production and I’m only talking a year away. Yes we can’t keep burning cash as per last Q. (was $20m of that to purchase LLL shares?)
Yes we’ve had some serious (self inflicted) problems, however we are no where near “cooked”. My main concern is an opportunist will make a cheap bid for the company (I call 35c cheap) and they’d probably succeed. I mean what a bargain that would be, any decent operator can make Morila profitable, they’d have well over $300m of infrastructure and 17.6% of Leo which they could sell in 2 years time for probably for close to a Billion.
(20min delay)