ORD plans to increase shareholder value over many years has always come to nought and all at great expense to its long suffering shareholder. Franks current salary is $393,300, which compares favorably with that of the president of the United States who earns a salary of US$380,000 p.a.
From where I sit the latest ORD scenario is all too tricky for me. Rather, I have woken up that its an exercise designed to continue to keep Frank and Co in clover, again, at Shareholders expense. That’s why I sold all my shares yesterday and today.
As a long term shareholder it was a very sad expensive lesson and pass on below my five points of concern.
POINT 1. Frank has been a Director in Ord since October 2009. Earlier that month each share (despite the great recession) was known to have reached 7.5 cents, giving ORD a capitalisation of around $25 million. In the intervening period there has been much promises and associated capital raisings, all of which disappointed and came to nought. The net result is each share today is worth just over half a cent, giving a market capitalisation of $3.4 million and little cash in the bank.
POINT 2. The Prospectus states “the issue under the Offer will raise up to $3,500,000 (before costs and expenses of the Rights Issue), the first $1.135 million of which will be underwritten by Patersons Securities Limited. My family as well as other members of the board of directors and management of ORD, ORD’s current largest shareholder group and/or their respective family members have 5 agreed to sub-underwrite an aggregate of $1 million of that $1.135 million”.
It appears Paterson’s is actually only underwriting $135,000 and for a fee, which does not strike me as any vote of confidence.
POINT 3. At the same time ORD Management are seeking approval at the AGM for an interest free loan to purchase 105 million shares, both interest free and with limited recourse. This essentially means a freebie for Management with Shareholders holding all the risk.
This mechanism not only provides an unbelievable deal for Management, but also a good safety net for their so called underwriting. A raising of only $475,000 from Shareholders has them completely covered. Once again does not strike me as any vote of confidence, other than a bit tricky.
POINT 4. At the time of the Dampier’s Plutonic Dome project announcement, Dampier (DAU) had a market capitilisation of $1.7 million now risen to $2.5 million.
Clearly the market sees DAU onto a possible winner at ORDs expense and why not. Dau has an offer from ORD of over 350 percent more than it’s then market capitalisation and still retains 25 percent of the project. Its not conceivable to me that ORD has mining knowledge and expertise, overlooked by DAU and the market as a whole.
POINT 5. The current remuneration of ORD Directors is currently $569,967. On top of this are Administrative costs that amounted to $371,000 last quarter.
Currently ORDs basic salary and administration requires the sum of $1,867,300 p.a. Adding on the interest free loan brings this to $2,392,300. One has to ask will the capital raising even cover these basic overheads, let alone the millions required to fund and develop Dampier’s Plutonic Dome project?
VAN Price at posting:
0.6¢ Sentiment: LT Sell Disclosure: Not Held
