Welcome to the world of mineral exploration! It's a speculative, high-risk investment. If you don't like the risks then perhaps you should consider buying shares in an established miner instead of complaining about the risks...
Personally I believe that this mob has earned some credits for responsible cash management:
1) They managed to monetise a smallish but high-grade prospect in Burkina Faso during a period when the prevailing gold price provides a very poor outlook for new mine development.
2) They have been able to gracefully exit that country when social, political and regional instability escalated the risks involved in staying.
3) They have been able to find a highly prospective alternative development.
I strongly suspect that the present share dumping is caused by a combination of profit-taking (remember this thing traded at 0.2c and several hundred million shares were traded at that price), and major gold-specialist investors exiting because we've moved away from gold.
Yes, I expect that there will be some dilution before the present prospect becomes cash-flow positive. And yes, I expect that we're looking at two or more years before that cash-flow positive moment comes. Don't buy an exploration company if you don't like it.
Buy if you do want to buy a minerals explorer you could do heaps worse than this one!
1) It has cash. How many other explorers have cash? There's at least 5 that don't for every one that does.
2) It has a well advanced, quite prospective project. Again, you'll find 5 explorers that don't for every one that does!
3) The management have shown flexibility, prudence and financial wisdom.
4) The geologists have demonstrated that they can find and define resources.
If you have a taste for the risks then this is a fine opportunity to be in on the ground floor.
GMR Price at posting:
0.4¢ Sentiment: Hold Disclosure: Held
