Couldn't care what you do Meerkat ... as a trader I find most of your posts generally lacking in substantive information I would use to base my asset owning or liquidating decisions on.
I'm a top 30 shareholder and bought in, average price 25c. Reasons I bought and continue to aim to hold are below, bearing in mind I was one of the shareholders who helped management understand Wonarah needed to be the number 1 priority project:
1. Rock phosphate prices likely to remain at record prices meaning the world's phosphate reserves are being reavlued despite company and management structures around those resources. No rocket science here. I am seeing farmers using the current profit windfalls to go out and actively accumulate next year's fertilizer pre June 30 to manage tax, and certainly that is where most of the overdraft request increases are going to be spent to manage tax liabilities moving forward if you talk to the rural lenders.
2. Rio's history here and not that long ago (2002) was almost endorsement enough for the potential of the project for me. That they were interested around US$50/t for rock and the prices is now US$400 is nothing short of fantastic.
3. Low market cap still. Management not everything given the valuation ascribed to the company. A low market cap dictates that even should management fail in their plans to achieve the initial 2-3mmt export target, there will still be the option of taking on an offtake/joint development partner yet still see significant SP appreciation in the future. Such is the nature of their important phosphate assets. I too believe the DSO is a pipedream though continued drilling will be necessary in anycase to shore up even larger rock reserves.
4. Early stages agricultural boom as oil prices will likely continue to surge that will continue to increase usage of fertilizers by the world's farmers. The fibre and animal protein market has yet to respond to surging feed grain values and when they do you'll be growing cotton where the back lawn used to be and chasing a couple of cows to graze whatever is not harvested. You can't comprehend the size of this brewing agricultural boom which will be very bearish for everything else in the world - equities, housing etc.
5. Further price rises likely for rock. Just like 'bubble' commodities like iron ore and coal continue to surprise the pundits despite huge global reserves, they simply keep going up in price.
AEV Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
