Forums will always have divergent opinions, its what they are here for. I myself will take a view somewhere around halfway between Kacy and Blythefan. They don't have zero/neglible debt (rather a congaline of p-ed off noteholders) and they don't have unservicable debt (if they take on $200m from ML, it will be used to expand mines and ports and evaporating ponds, Blythefan missed that point in his/her analysis). I personally don't think ML will materialise given the tumult on wall street and $200m is around 3 times ADY's current market cap (I know, it would not be a convertible note so there is no reference to sp, but ML is trying to exit alot of high-debt-ratio companies not create more).
There are quite a few imminent cashflow problems about to land, but also quite a few options to resolve them. If every one of the resolutions to get more cash quickly fails then there will likely be a quick placement, which at the current price around 7c would be quite dilutionary but it is what this company does (i really wish they could time this side of things better). This would drop the price again due to the whole supply v demand equation, but then the price would pick up again as the wolf is no longer at the door.
Phil Thomas strikes me as a larger than life character, lots of big plans that reality takes a while to catch up to. If you proceed from that starting point, if you take what he says as being what he wants to happen not what will happen, the current situation won't rankle or concern you as much. Taking his BS as gospel leads to failed expectations, which is a major part of the current dismal sp.
While Admiralty could not have timed their expansions at a worse moment (slowdown in iron demand from china, credit markets and sharemarket seizing up, even drought in chile causing hydroelectric brown-outs south africa-style), they are producing from both their headline acts (cia minera and rincon salar). Woody Allen said 80% of success is showing up, ADY have a better chance of making it through all these probs than the would-be producers of the pilbara and midwest WA (expansion does not cost as much as initial development, particularly for magnetite) simply because they are already producing. Have a read of the AXO story, it will show how far zero production but excellent potential in the magnetite game can get you.
If you are a trader then this is the stock for you, its shareprice is all over the place (and forums like HC and another-i-won't-mention enable plenty of ramping opportunities). If you are an investor, best to be a patient and somewhat steely-nerved one as this rollercoaster aint even halfway through its first barrel roll.
Hope you make the right choice for you Suzke.
ADY Price at posting:
6.4¢ Sentiment: LT Buy Disclosure: Held
