I share you frustration Moorookamick, but GXY woes lay not at the feet of the Chinese. The main causes of GXY's troubles were: - an over eager ex-CEO, who expanded too quickly and did not cut his losses early enough. The writing was on the wall for Jiangsu quite early in the piece. If they had seen this, and sold it 18 months ago, existing shareholders would be much better off (i.e. not diluted nearly into oblivion). - the GFC, which took away the easy credit upon which GXY relied. Without the GFC, GXY would have been able to re-finance much easier, and we wouldn't have been squeezed by our creditors. - the general Chinese market (rather than Chinese directors). GXY were operating in a strategic sector in which foreigners are squeezed at any opportunity. I have suspicions about all the difficulties we had getting Jiangsu up to nameplate, for example. A Chinese firm in the same situation (and our direct competitors) would have been given easy credit until they became profitable. In the end, the Chinese machine did us in.
If I was going to make a complaint to ASIC it would be about the misinformation leading up to the capital raising. One day we were being told that Jiangsu was progressing towards cash flow positive status (which led me to top up), the next we were being told that we, the shareholders, would have to inject equity or else the company might go bankrupt.
Having said all that, China is behind us now, and I think we are in a very well placed to move forward as a lithium exploration and development company. In retrospect, that was the only space open to us given the reality of the rare earths market in China (which dominates the global markets), as well as battery production market. But you live and learn, I suppose.
GXY Price at posting:
6.7¢ Sentiment: Buy Disclosure: Held
