Try has been working very hard. Mind you without current management the company would have lost at least two months of production in the transition to the RIM candidates probably finishing the company or requiring a massive A$30m capital injection by RIM. So last year shareholders did themselves a favor by voting accordingly at the EGM. Unfortunately a lot of shareholders showed bad judgement and voted against their own best interest, the vote was very close.Current operations have two issues. First is LOM which should be able to be prolonged by a year, but not more. Then there will be a slightly elevated risk profile once Smarts 4 ore is mined out and only Hicks + Smarts 3 are sources of ore. If there is a slip at Smarts 3 during wet season it means complete reliance on the stockpiles + Hicks. No problem after March once the Investec debt is paid off. Next rain season will be the smaller one (peaking in December, more serious wet season conditions with peak in June).
The remedy for LOM won't be Smarts + Hicks but new deposits.
My concern is what will happen if TRY get good drill results? Mind you we have seen a weak share price for two years (mitigated by the fact that management avoided a capital raise during that period). I would want to see the due rewards for all that waiting and not see the company being snapped up by an acquisitor. Because once you have good drill results from a target like Gem Creek, Upper Itaki, Goldstar or Ohio Creek, the question will be if it really is a world-class deposit, i.e. the size of the deposit. This will be very likely considering neighbouring targets like Aurora (6.5m oz), Toroparu (10m oz) or Omai (5m oz). To prove the size you will need lots and lots of follow-up drilling. If mineralization is encountered at depth it means dc drilling will be needed, even more expensive. During that time frame the company will be very vulnerable and could be taken out for cents on the dollar. A situation that could be avoided by acting swiftly requiring ready access to capital and maybe taking on a strategic investor. Taking on a 20% strategic investor can do wonders to the share price and fend off a takeover attempt. Best example is the Anglogold takeover of Normandy when the 20% Franco-Nevada stake in Normandy enabled the three-way merger between Newmont, Normandy and Franco-Nevada. Combing through Newmont's stable of mines and comparing formerly Newmont mine reserves with formerly Normandy mine reserves, Anglogold would have made the bargain of the century. And who says the price should not even have a premium to the market price considering the fact you just cannot get 20% buying on market?
Consistent with my voting at last year's EGM and AGM I will vote again in my own best interest and vote for the extra 10%. Currently there is no need for capital and no plans to do anything (as stated in the last report or proxy form), but I think the added flexibility and possibility to get a strategic investor onboard (if needed) is required. Much easier to find someone buying 20% than 10-15%. So far the track record of "new" management is spotless since June 2017 and it seems they are going to be prudent with capital in the future too. Probably the matter is completely irrelevant, I just think voting is the one thing we can do as investors and so it maybe worth focussing on that.
