Aurelia Charting, page-77

People write about the legacy of Dragues. This goes beyond the fact we bought a dud. Firstly we had a share register of 850 odd million. We diluted this to about 2/3 of the register by raising funds (a lot through instos) at 43c. 850 million shares even at this market cap would still have us above 30c. Dragues lost money from the start so the share price tumbled and we crashed out of the ratings so we we were dropped by instos. We stopped paying a dividend (and it was a healthy one) so any value in the S.P. because of possible income became defunct. Cash fell from $106 million and no debt to $29 million and falling fast, We were at risk of going out the back door. All with $200 - $300 million of mills etc. Then we raised capital at 9c. That wasn't long ago and again the shares on issue went way up. Protecting the register as we should have done was dispensed with out of necessity. So it's not just a matter of a failed management who lost investor confidence, but a whole lot of associated issues including 1. a massively increased share register, 2. falling out of market indexes 3. Lack of return through a dividend 4. an easy profit if you bought at 9c so selling at double your money has appeal, 5. LOM issues as Hera was winding down and the fact Dragues did nothing to address this so money was thrown to the wind (the exciting new exploration targets amounted to zip). And so it goes.
So while we now have a focused and competent leadership ( and workforce that goes with the above) the other legacy issues still hang over us to various degrees. Succinctly, if a stock in leading market indexes, trading highly profitably, with good assets assuring future revenue, returning cash to share holders via dividends and a contained number of shares on issue, was on the market today with the mines we have, then I'd say we'd be +$1. If I were on the Board, I'd be looking at restoring profitability to a good level first and that includes accounting for a moderate amount of capex spending after Federation is in full production. The next steps in my view would be to 2. do a share consolidation down to about half the current number on issue, then 3. Restore the dividend.
I think if we should take about 2-3 years to do the above, with both Peak and Federation providing LOM past 3032 so guaranteeing we have the income. Great Cobar and Nymagee (plus others as exploration continues) will after the 2-3 years require capex spending tp bring them into production. So I still see 30c on the horizon maybe by the half yearly report provided we keep with current efficiencies (eg high throughput at Peak and Federation staying on course, continued exploration finds to grow the inventory). We will obviously still hold a lot of cash as the past 12 months has proven so share holders need to be considered with the aim of reducing the shares on issue, building the share price and rewarding shareholders with some of the fruits of the company's successes.
It's almost 2 years since a certain gent left. Sometime during the next 2 years I'd like to see some of the steps above taken to expunge totally any hangover from the CEO and Dragues era that was a regrettable part of our history. And like KKR I've been in since YTC days, and I'm of an older age group so see these steps as short to medium term rather than waiting another decade to get something back for supporting the company through the bad times. I'll also say I didn't apply for share at 43c when Dragues was bought because I saw it as a bad deal, but I applied for mine plus shortfall shares at 9c because it was obviously a good deal. I'm not selling under 30c because we are currently too cheap based on revenue, profitability, M.C. the potential uptick that is just around the corner Federation will provide, and continued exploration successes