Sounds like a classic case of management pumping up the story and now we are seeing (the market) dump. Seems like really inexperienced management who are capital market rookies. They were able to raise at a high price, but the cost is the price is likely to stay low for long (a year?) Because they have lost investor's trust.
Publishing extremely high sold prices for large cut rubies in presentations (to get people's interest given the low market cap - making people thing it might go up a multiple based on those gems alone), advising the market of large rubies and then saying they were never meant to generate material cashflow. Geez! How is anyone ever going to believe/trust them again?
The questions I'd have now are:
1) what price can they actually get for their rubies - market expected them to be jewellery grade, but seems they are guiding towards much lower values (perhaps they are industrial grade?)
2) what are the mining costs and thus what is their gross margin
3) is their margin on say 200k carats sufficiently high enough to justify their market cap?
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Sounds like a classic case of management pumping up the story...
Add G79 (ASX) to my watchlist
Currently unlisted public company.
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STRATEGIC ENERGY RESOURCES LIMITED
David DeTata, Managing Director
David DeTata
Managing Director
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