Ann: Trading Halt, page-88

A bit of a three legged omnibus effort on a Saturday Sunday arvo:

Topic One: joint CFOs

Thanks for sharing your coalface knowledge, Grumps. It does look however as if this tandem working arrangement is something the two accountants have used before. With Vince Fayad being the principal and Kurt Laney being his lead side-kick at Vince Fayad & Co, my guess is that in practical terms VF will be the frontman but with KL doing much of the work. Moreover it is clear that both of them will have the freedom to provide services to their other clients in various capacities. It could be that they are on hourly rates rather than on a set salary which would mean that Vertex is not paying to have a couple of experienced chartered accountants sitting around twiddling their thumbs or alternatively not employing someone who is underskilled. I've seen nothing to suggest that both accountants will be on a full salary package.

From the Vertex ASX announcement of 6 May:

"Vince brings extensive public company experience, including his current role as Executive Directorand Joint Company Secretary of Astute Metals NL (ASX: ASE). Kurt also serves as CFO and JointCompany Secretary of ASE. Over the past decade, both Vince and Kurt have held Joint CFO andCompany Secretary roles across several other ASX-listed companies."

This flexible working arrangement, which allows Vertex to have experienced knowledgeable professional support on hand when needed, likely suits perfectly the currently humble circumstances of Vertex (remembering also that Vertex is not in WA where every third bloke you meet could claim to have some experience as a mining accountant). So, bottom line is I don't see any harm in having both accountants signed up in this arrangement.

Topic Two: The capital raising currently underway

Just going back to some of the criticism about the need for Vertex to raise capital, which they are currently doing: I argue that much of that criticism is ignoring the risks that Vertex is facing.

Roger Jackson and his team are attempting to pick up a failed mining venture using plant they nabbed from another failed mining venture. They are attempting to do this on the cheap by assuming they can do without a ball mill, that the quartz will separate cleanly from the country rock (grey wackie?) and be sufficiently separated using a sorter, that they can retrieve between 90% and 95% of the gold using only gravity and that the numbers will still work for them if they are producing 30k ounces a year or maybe even less (mining operations have a number of fixed costs that are much the same whether you are producing 30kozpa or 100kozpa - which means the margins are much tighter with smaller operations).

If everything goes perfectly then they likely don't need the extra liquidity cushion but having that cushion already in place would buy them a few extra months to sort out any crinkles they encounter in the start-up period. But if they chance it and hold off raising a liquidity cushion until when they actually need to access that buffer or cushion then the deal at that time would be done at terms far less favourable to the company and us shareholders. So, again, bottom line is I support Vertex's prudent action here.

Final topic: comparing Roger Jackson to Bill Beament

To the poster who seems intent in pointing out that Roger Jackson's record does not stand up to Bill Beament's record: mate, I find that a fairly gratuitous shot at Roger Jackson. The point of the original post comparing NST to WTX was that even a mighty firm like Northern Star faced existential risk when it was starting up its first mining operation and in that post no comparison was suggested between RJ and BB. Not sure why you felt it necessary to then compare RJ to BB. True, Bill Beament is a legend who took NST from a market cap of $10m to a market cap of $10b, but his particular brilliance was in mergers & acquisitions - NST instigated 16 successful corporate transactions during that journey under BB. Of course RJ does not have a unique record like BB but that does not mean the bloke lacks the foresight, the drive and the skill set to deliver Reward as a fantastic mining operation. At this stage I'm backing RJ to deliver this project.