In their favour - and keep in mind I am probably the most critical of former fanboys - the decision to go to small scale production isn't a bad one as follows.
Essentially I was thinking of the typical explorer cycle in which a company gets hyped up and has a cap raising while everyone is excited - but as time progresses the SP falls.
With the 15% limit on annual cap raisings without a general meeting this means that every year they have less and less to spend on exploration with increasing dilution and so the SP falls further - which means even less exploration.
Eventually you end up with the typical small explorer with a billion shares on issue - lucky if they can raise $1m for exploration.
GOR this year will have trouble raising capital to fund next years exploration - there is no way they will get last years CR price (0.32c) which was down on the year before (0.34c) and so they start the death spiral to billion share oblivion.
Unless they have a cash flow from operations. So even if it is only a small cash flow it may keep them alive and out of the penny dreadful basket.
My issue is the lack of aggression and progress in the exploration program. The production is a side story. People are buying GOR for the exploration and it just isn't happening - despite more geologists, more rigs and a michelin chef.
GOR Price at posting:
30.0¢ Sentiment: None Disclosure: Held
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