Hello SH, good question and nicely framed.The cash burn has been...

Hello SH, good question and nicely framed.

The cash burn has been an issue, a big issue as they built their operations to the point they had enough ore developed (gold bearing rock and dirt) ready for processing.

A major part of cash receipts have been used this past 18 months to get to this point and the $2M budgeted for development in the 5B last quarterly indicates they are there at last. This is only one issue however it assures cash flows from production now so that was the primary focus until now.

PaulF is a class act (new CFO) and has already started to show his abilities attacking costs, ditto MarkH. I believe this will be an ongoing task that they would have prioritized carefully based on savings. We will continue to see this emerge along with lower cash costs as they work through each area of the business.

I am not privy to Paul's detailed work agenda so I have no measure of how far he can get costs down. I can only see direction and that is why I claimed we are now at the turning point on costs. The move has started.

The CRE takeover initiation was followed by the Stone blocking stake and talk of cornerstone investors etc. That is long ago it is unclear if this will still happen or not. I expect it will at some point. I could see a cap raise in future and I could also see FML gradually trading up and not needing one now things are 'turning' around. Not essential now so who knows??

In short cash costs to fall, minimal development for a while means that can now bank cash and build that essential buffer and retire the tiny debt of $8M. They can also turn to grade and look to reduce costs via new high grade development so this will be the target IMO.

Progress is great and much further to go so expect cash costs to fall over time with improved waste control and new cost saving initiatives to be introduced.

Valuation mismatch is extreme when you look at the assets and against FML's peers if you believe (as I do) that these words are true. Sorry I did not attempt to quantify the numbers estimates are not fact and i wanted to be as accurate as I could for you.

CW
DYOR&DD