With presumably the quarterly update due this month, I have just been pondering on what management can do to clarify the future for us, and importantly to see the stock get a decent market valuation. Dividends are nice, but we all want to see much overdue growth in the share price. Operationally we are a sound company, big tick for Graham and co, that is what keeps us all here. But, whilst people will of course have their own views, my mind is constantly thinking about two things; the registry, and the unlisted options we have with an expiry date of 3rd August 2023 @ $0.053.
Snapshot of company today:
| Shares On Issue | 3,756,758,171 |
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| 1 | Options (Unlisted) @ $0.053 | 180,000,000 |
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| 2 | Share Price | $0.028 |
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| 3 | Market Cap | $105,189,229 |
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| 4 | Fully Dilluted Market Cap | $110,229,229 |
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| 5 | Dillution % | 4.79% |
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| 6 | Exercise | $0.053 |
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| 7 | Fully Dilluted Market Cap at Exercise | $208,648,183 |
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| 8 | Value of Unlisted Options at Exercise | $9,540,000 |
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Estimated cash on hand at 31/12/2022:| 1 | | Cash on hand at 30/9/2022 | ,070,000.00 |
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| 2 | Estimated receipts (8000oz @ $2600) | $20,800,000.00 |
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| 3 | Aquistiion of Gecko | -$7,750,000.00 |
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| 4 | Waiver to Bulletin Resources | -$50,000.00 |
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| 5 | Dividend @ $0.001 | -$3,756,758.17 |
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| 6 | Estimated Costs (8000oz @ $1800 | -$ 14,400,000.00 |
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| 7 | Estimated cash on hand at 31/12/2022 | $13,913,241.83 |
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Details of unlisted options:
| Unlisted Options | Issue Date | Number of shares | Value at Exercise |
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| 1 | Graham McGarry | 4/01/2021 | 40,000,000 | $2,120,000 |
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| 2 | Geoffrey Greenhill | 4/01/2021 | 40,000,000 | $2,120,000 |
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| 3 | Sarah Shipway | 4/01/2021 | 20,000,000 | $1,060,000 |
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| 4 | Jason Bontempo | 4/01/2021 | 20,000,000 | $1,060,000 |
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| 5 | Employees of the company | 3/08/2020 | 30,000,000 | $1,590,000 |
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| 6 | Employees of the company | 4/01/2021 | 30,000,000 | $1,590,000 |
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Shares on offer at market today: | Price ($) | Volume | Value |
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| 1 | $0.029 | 3,870,933 | $112,257 |
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| 2 | $0.029 | 184,631 | $5,354 |
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| 3 | $0.029 | 360,000 | $10,440 |
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| 4 | $0.029 | 40,000 | $1,160 |
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| 5 | $0.030 | 1,000,000 | $30,000 |
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| 6 | $0.030 | 1,000,000 | $30,000 |
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| 7 | $0.030 | 1,000,000 | $30,000 |
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| 8 | $0.030 | 1,000,000 | $30,000 |
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| 9 | $0.030 | 203,872 | $6,116 |
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| 10 | $0.030 | 35,714 | $1,071 |
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| 11 | $0.030 | 250,000 | $7,500 |
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| 12 | $0.031 | 1,000,000 | $31,000 |
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| 13 | $0.032 | 500,000 | $16,000 |
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| 14 | $0.032 | 20,000 | $640 |
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| 15 | $0.033 | 40,320 | $1,331 |
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| 16 | $0.033 | 1,251,451 | $41,298 |
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| 17 | $0.034 | 4,000 | $136 |
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| 18 | $0.035 | 161,280 | $5,645 |
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| 19 | $0.036 | 200,000 | $7,200 |
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| 20 | $0.037 | 5,686 | $210 |
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| 21 | $0.038 | 701,400 | $26,653 |
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| 22 | $0.038 | 120,000 | $4,560 |
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| 23 | $0.040 | 1,270,000 | $50,800 |
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| 24 | $0.040 | 500,000 | $20,000 |
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| 25 | $0.040 | 280,000 | $11,200 |
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| 26 | $0.042 | 100,000 | $4,200 |
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| 27 | $0.050 | 200,000 | $10,000 |
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| 28 | $0.068 | 900,000 | $61,200 |
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| 29 | $0.068 | 100,000 | $6,800 |
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| 30 | $2.500 | 510 | $1,275 |
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| 31 | Total | 16,299,797 | $564,046.76 |
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There is a potential dillution of 4.79% coming due to the exercise of these options, although that would come with an injection of $9,540,000. Obviously at today's price these options are not particularly attractive. I wonder what management think of this current situation and whether they are incentivised to obtain these options or not? I mean of course they want the share price as high as possible; in an ideal world the share price would be $1 and they can snap up millions of shares for a penny. But realistically are these options in their minds at all? The stock needs to effectively double for them to be a consideration. However, given only ~16m shares are currently on offer at market with a face value of ~$564k at an average price of $0.0346 - including the rather optimistic seller of 510 shares at $2.50. There is quite a shortage of shares on offer in comparison to these options. Exclusive access to this many shares at a fixed price is not to be sneezed at. For example, for Graham to obtain another 40m shares on market in short-order he would likely drive the price near the exercise price on his own. We know from recent activity that Graham has an appetite for more shares still, evidenced by his purchase of another 17,000,000 shares @ $0.027 in December 2022. His activity is likely what recovered the stock from $0.022 last year.
The elephant in the room: I hate that I have to keep bringing this up, but it truly needs to be addressed. We are bloated with shares at 3.75bn, and if the options above get exercised we are going to be a shade under 4bn shares on issue. We were told last year that management would address the registry towards the end of 2022, but since that time we have had zero action and given there is no mention of it in the annual report, zero updates also. Fact is anybody that purchased this stock between June 2019 and August 2022 is likely underwater, even with the dividends. With estimated cash on hand of ~$14m (see above), what are we doing with this? I think it is time to issue a consolidation AND a buyback. A consolidation of 25:1 to bring the registry down to ~157m shares, with a reciprocal share price of $0.70 based on today's $0.028. Then issue a buyback of up to 7.47m shares at $0.75 totalling ~$5.6m. For context that is equivalent to 100 days of trading based on current 50 day average volume and the current shareprice. That is a 4.7% reduction in the shares on issue, and a 7.1% appreciation is the market cap due to the floor in the price. Surely that is the equivalent of putting on our best suit, combing the hair, and trimming the nails to attend the ball? With a gold run seemingly imminent, we want to be looking our best to attract the most possible positive attention. And yes we can do all of this whilst maintaining the current dividend policy. I believe these actions are absolutely necessary in order for the company to make significant steps towards being a $250m company by August, which would incentivise the exercise of unlisted options. Are we all happy at this point? I would think so.
My two cents worth, and hopefully Graham reads this and takes it into consideration for a market update.
(20min delay)