Hey, I just wanted to reply to 71c4 and some things been said.
Ok so, the issue is the number of shares on issue. Personally, I find it a little bit disturbing and I tell you why in a moment. Firstly, I honestly view this company as an investment. Ive taken the opportunity to make some trades here and there since I got in originally at 5.5 in November, but have also been doing the same as Pinto and building up a fairly large core holding. I know current mine life is short based on reserves but I also know the resource potential is massive. Check the Focus website, there are some interesting articles going back several years in the Investor area, which back my view on this. These reports and analysis are independent. I got into this stock because I was looking for a gold PRODUCER. I am massive bull on gold, I think the best is yet to come with gold, and am just flush thinking about gold, gold, gold. Just so everyone knows where I am coming from. This, for me, is a GOLD play as Choo said, a proven producer, pretty static costs going forward, the variable for me is the gold price and first and foremost I am punting its going up ok? Secondly, this company, from my research, looks like being likely to increase the mine life to 10-15 years. Again, other research from other peoples reports back this up. Thirdly, this management is top notch. So its a long term hold, buying on weakness like recently, will be looking to trade some on news (like the March quarterly)
The number of shares on issue is an issue for me for two reasons. First, as a $170M company, a 5c share price is not a good look. Its attractive for traders because small movements.driven by nothing more than sentiment, can deliver good profits for short-term trades. Traders become self-fulfilling prophecy, I saw them get a hold of BLY recently and never let go. It becomes harder to break out of a range, regardless of the true valuation of the company, its assets and the resulting share price. I think with a consolidation, there may be some initial weakness in the price but this will be because traders are exiting the stock, providing both a buying opportunity and also a more stable share register with a higher proportion of investors vs traders.
The second thing about the number of shares is the cost. The company pays Computershare to maintain the share registry, and this is a cost. The more changes to the share registry, the more they pay to keep it up to date. The more low-priced shares on issue, the more traders are involved looking to scalp 0.2 of a cent here and there. The higher the cost to the company.
If a consolidation occurred, I wouldnt be crying, Id be buying the first week after it took effect.
This is what FML has done: * researched * consolidated the land for synergies from one large op rather than lots of small * started cashflow and profit * used cashflow to add asset (mill)with multiple benefits ie lower production costs and alternate cashflow options * Opened hedge-book in early operations to reduce risk (that's what a hedge is) then closed the book once operations were self-sustaining * Now identified and executing targeted and intense exploration operations financed by their own cash-flows
To answer your question on debt...no, debt is no problem when correctly handled but what, exactly, do they need moeny for? 10 drilling rigs? They've created a self-sustaining operation. The operation is in gold, so by investing in this company, you betting on POG. You ain't betting on a massive new resource being found like a lot of the dirt scratchers out there. They already HAVE the resource, they now looking to prove it up and move mine life from 2 years to 15 years or longer.
71c4 I think maybe you bought at the wrong time?? And are wondering if youll ever see your money again? Mate, this pull-back, in this stock, is irrational and we are now in the hands of the traders. What we need is really good news to break the bands. As per one of my previous posts, take a powder, go to sleep and wait for the March quarterly. :-)
FML Price at posting:
6.1¢ Sentiment: LT Buy Disclosure: Held
(20min delay)