Dear Astro Boy. Once upon a time Focus Minerals ASX: FML had...

Dear Astro Boy. Once upon a time Focus Minerals ASX: FML had $250 million in cash and no debt (in 2012). Fast forward 6 years and today it still has no debt but cash in bank is down to $45 million and they stopped mining gold since 2014!!! They were supposed to become one of the top gold producers in Australia after they received $250 million cash from Chinese investors 6 years back when they were mining gold and look at them now. They don't mine gold anymore, are burning cash at a rate of 35-40 million a year, plants are ideal, Australian management replaced with Chinese management, etc....On top of all this FML went through share consolidation 3 years back like GXY did. From less than 2 cents a share before consolidation to 33 cents a share after consolidation, today FML SP is 17 cents. GXY's SP has also halved since reaching high of $4.50 last year.

So basically having large amount of money in bank doesn't mean anything unless management knows how to use it wisely and I doubt GXY management has got that skill.

Wouldn't surprise me if GXY goes the same path as FML in next 5 years.

DYOR