Hi Whisky, Cujo et al., Whisky: You are totally correct. Cujo: I...

Hi Whisky, Cujo et al.,

Whisky: You are totally correct. Cujo: I dont believe anyone should be/is 'apologetic' about FAR's CR outcomes.

Having been in the exploration/resource ECM game for more than 3 decades, O&G was always the toughest to get 'right' in terms of pricing, timing and quantity. Its so much more a game of chance and patience than mineral exploration; with binary outcomes and much larger SP downside bias given the much longer time to work up material drill targets.

Pretty much 90+% of all stakeholders are never happy with any O&G exploration equity raise. If target comes in, there is the cry of "low price dilution" (by the majority of non-CR participants) to be closely followed by market concerns for the coming need for appraisal capital. If the target fails, CR and exiting shareholders will always dump the stock to below below pre-drill fundamentals and not give management any credit for being smart re the pre-drill CR.

I'm sure FAR and their corporate advisers debated long and hard over whether to cup $50+m pre Samo at 11-13c to take some advantage of pre-drill SP hype. The standard O&G ECM practice is that if the market gives you a bit of a pre-drill ski-jump...ALWAYS TAKE IT...but only what you really need to get through the next material upside event. But because ECM teams can't pick the outcome and corporates (and their major shareholders) are always more biased to a positive outcome than reality, the debate can be lost as was in FAR's case.

So FAR gambled against industry practice and probability...and lost. But why did they?

I strongly suspect they were blinded (or advised?!) by the near fatal corporate attraction of combining critical, yet differing strategic objectives into single capital programs. IE; look to do one big CR for $250-350m at 20+c for BOTH sustaining and project equity purposes post success of Samo. FAR's mistake was to speculate a outcome of higher risk exploration objective to effectively fund both future exploration and lower-risk Project development requirements. They should have been treated and done separately.

This is not about hind-sight. Its industry standards, probability theory and common sense ECM practice.

So they made a bad call. But I've also never known anyone in the O&G game NOT to make a wrong call (there is a slight difference between 'wrong' and 'bad').

Regardless...I'm staying (and added in the last CR).

Cheers,