So now that your EXG shares have hit a 5 year low are you...

So now that your EXG shares have hit a 5 year low are you willing to consider that "director competency" doesn't necessarily dictate share price...

And that new directors in and of themselves don't change much. It's the actions they take once they are directors that makes the difference so its presumptive to count your chicken before they hatch.

Ultimately, when it comes to mining, I believe that whilst management is important, it's the resource itself that mostly determines the value of a mine.

And that's EXG's problem... the resource has being called into question by the market and now the management is "beginning" to come clean on some of the problems as outlined in the latest annual report:

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Shortfalls in ore tonnes again impacted upon ore delivery to the Paddington mill resulting in reduced gold production and associated cash flow shortfalls.

Ultimately, as disclosed in the Prospectus dated 13 July 2016, it was determined that “corrupted resource definition modelling data provided erroneous mine reconciliation information”.

The report on a new geological resource model, revised Zoroastrian open pit reserves and the associated new pit design has not been received. This process is still underway, however it is understood that the Zoroastrian open pit reserves are likely to decrease.
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When this is considered it makes sense why GWR didn't execute their option to buy more EXG shares at 3.87c (a discount to even today's price)...

So now the question is "how much will the reserves decrease" in the updated modelling?

If reserves decrease less than 20% I think the share price will rally rapidly from these levels off the news.

If it's more than 40% it'll be hard to say where the bottom will be in a stock as illiquid as this as the stampede for the exits ensues.

Obviously this morning someone wasn't willing to wait and wanted out at any price...

For me at $0.04 EXG is trading at a valuation of $35 for its measured and indicated ounces with the gold price north of $1650... so whilst EXG looks high risk there would certainly appear to be some upside to that risk given that most ASX300 gold producers presently have market caps that value their M&I ounces at A$200 to A$300.

Problem is that even before this setback EXG's future already looked questionable because of their resource being too small to build their own mill. This news only puts them further away from being a genuine gold producer IMO.