Looking at this objectively – ‘Yes’ the market cap/share price...

Looking at this objectively – ‘Yes’ the market cap/share price is rubbish – investor sentiment is clearly nearing an all time low – our $110M market cap is pathetic which in turn is not pleasing for any of us especially those of us who have been invested for many years – that’s a given.

However – if we dig deeper and ignore the market cap/share price for a moment and just concentrate on the position in which the company sits today.We are in the best position today than at any point in the past with Mahalo North looking as if it will come good being fast tracked to production with us having 100% – we are being ‘free carried’ at the Galilee Sandstone Deeps retaining 70% - Mahalo is moving towards production with us retaining 40% - and we have cash in the bank.

Now that doesn’t mean that we have the liquidity or funding ability to pay for our share of all of the costs above – but the strategic position in which the company finds itself today far exceeds any position of the past.

So we have to ask - Why were investors prepared to back the company in the earlier stages when the risk was greater – yet today when much of that risk has passed they are not so keen?It’s mainly down to the markets in general and how investors assess longer term investment potential verses short term tight margin returns.

The latter algorithm based trading looks to do nothing other than make a short term margin – quick in and quick out trading the volatility – and if one gets it correct more times than not then there’s profit to be made. Granted a few years ago the ‘froth’ which bubbled away on the pint of the market cap was only a mid single figure percentage of ‘totality’ - and as time has progressed - the froth percentage has increased in size which is really frustrating as any good news will be sold into thus keeping a lid on the market cap/share price.

As to the former long term investment potential – I’m of the view that the rewards will come when we are either generating a profit from production or we are taken out.I still believe that we will be taken out because it’s in no producer’s interest - who collectively are struggling to replace production ready reserves – to have a minnow like us come along and pinch a part of their market share. They need what we have got so there’s zero point in them throwing money poking holes in the ground in longer term risky ventures that even if they should come good – will not do so in the time frame required to solve the immediacy of diminishing reserves.

The difficult call will be whether the shareholding majority deem the 'take out' price that I believe will offered to be acceptable or not.

I strongly believe that the future route for small caps will not involve floating on the main markets – to be successful one needs to be valued on a sum of the parts to come up with a net asset valuation rather than a pure multiplication exercise whereby a company’s worth is purely based on the last share traded.

You maintain control of equity under a private company banner – no algorithm trading – no company valuation based on a multiplication of the last share sold/bought – a company’s valuation is assessed on it’s true net asset worth - the competence of it’s management and the buoyancy of the market sector in which it operates.

My prediction: The future rising stars will be private companies in the main – yield chasers will favour the Blue Chip Plc’s but those looking for higher yields will back smaller income generating profitable Plc’s – any Plc looking to reach the point of income generation/profit will be at the mercy of the traders.

That’s the markets today – that’s how life has changed with technology making decisions for us and ruling our lives. It shouldn’t be surprising really in that those of us who can recall the 1987 market crash will remember only too well the finger that was pointed at the basic automated trading systems which were programmed to sell into the markets at any price should the markets experience a fall over a certain percentage – thus the self fulfilling prophesy of selling into a falling market. That was 33 years ago but the situation is just the same today - however technology has moved on with the speed of automated transactions being cut to milliseconds with the immediacy of decision making based on historical trends being the life force of the small to mid cap markets.

Such reliance on technology is not just applicable to the markets - mankind is entering a scary phase where the decisions we used to make for ourselves are being replaced by those made by technology – and if one is prevented from using a natural ability to do anything – it isn’t long before that inherent ability is lost as the brain/body is quick to adapt and only expend energy on what is vital for survival.

A throw away line maybe – that some may feel is a step too far with regard to mankind’s future importance on this planet – but there is school of thought that once we all become totally reliant on technological solutions for survival with cash eliminated in society – that those who build the systems are in total control.

My thoughts for what they are worth.