If you look at the financial statements and current operational performance of this company then bsred is most likely right. The bankers have been controlling the show for well over a year now.
The company has way too much debt and is making a big loss. Management should have raised capital at $1.20-$1.50 per share to pay off all the debt when they were basically an explorer. They didn't and everything is easy with 20 20 hindsight.
Valuations of mining companies always change when they go from exploration to production. The market stops looking at the stock in ground and starts looking at cost of production and margin on production. I don't know the exact figures but at a rough guess 9 out of 10 exploration companies fall foul for at least a time and some forever when they go from an explorer to a miner.
My current take on the situation is that the banks are trying to maximize their return, hence it's not in administration yet. Shareholders are very unlikely to receive a return. In the event of a white knight (which is highly unlikely IMHO) then current holders will get so diluted it's not funny.
I have followed this thread for a long time and I think the lesson for most longer term holders is that things change a lot when a company goes from an explorer to a miner. That is where most of the money is lost if you like speculating on mining stocks!
BSred is bullish IMHO, I would rate the chances of survival of this company at no more than 20-30%. At least you get near on 50% chance on black or red.
Happy Investing all!!
DML Price at posting:
2.8¢ Sentiment: Sell Disclosure: Not Held
