I agree with all you say. I believe current management have performed poorly. But there are some signs perhaps Gareth has heeded our cries and will try to be transparent from here on in - we live in hope.
My GM recently told me that any professional GM or MD when they come into a business that is a sh!t show will usually take the opportunity to write everything down and buy themselves some time in the role. That way it's a bit easier to over-deliver going forward. I think and hope this is what Gareth has done - which now gives him a chance to exceed current expectations.
I've been thinking a lot and reflecting on my investment. As I have some ripper stocks such as PLS, AKE and others, I tried to identify the main reasons why CXO hasn't so far worked out like the others.
The main conclusion I came to is that SB sold us some hyped up, unachievable bullsh!t!!!!.
Some people love him and I used to as well. But he has cost us all a lot of money.
He kept banging on about the following;
- Lets get some more resource and look at doubling production - Let's look at selling the excess spodumene (above contracted quantities) to the spot market, or maybe do a deal with Tesla - Let's do a study for downstream LiOH production in Darwin.
I mean, was this some sort of sick joke??. Forget about the Hydroxide plant mate, you designed a mine and plant that will struggle to deliver HALF the contracted volumes within the contemplated time frames.
This is where things went wrong. Instead of a more robust mine and plant design, they went off half-cocked on studies to double production and make Hydroxide. Give me a break!!
The gravity DMS flow sheet was supposed to be LOWER RISK than the traditional DMS and Flotation. I loved Core due to the perceived lower execution risk (knowing the others had issues with flotation) and the fact they claimed to get good recoveries with such a simple flow sheet. But they Fu(ked it all up and there are too much fines - at least in the Grants deposit.
Poor old Gareth (who has floors for sure) came into this sh!t show he had been handed by a geologist (SB) who knew nothing about designing, building and running a plant.
Now he has to start from scratch a bit and play the cards he has been dealt. So I will give him the benefit of the doubt for now and a chance to turn this around.
CXO can still be a great little company valued at a couple of Billion or more, but they had better start getting things right from here on in.
CXO Price at posting:
64.0¢ Sentiment: Hold Disclosure: Held
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