I too am surprised by the possibility of zero reserves. I can understand that there is now information on cost which can make areas considered viable non-economic. I find it hard to accept it can be a 100% problem.
I can also understand how that the overall economics can have changed so that while there are some economic reserves, that overall, MAD has no value.
However, if this was in any way believed to be the case by the board, then I do not get how they were able to get the capital raising off the ground, or why Morgans would offer the supporting valuation. This would be a serious breach by senior management, directors and Morgans, if they have misled the market.
Gullible or not, I continue to assume that these people would not do this. I accept they may be wrong in their opinions, may be optimistic and are conflicted, but I still expect they are managing to their obligations.
I too am sure we will see lower reserves published soon and who knows what it will do to SP. They can come down a fair bit and credibility will go up enough to possibly offset any loss in underlying value, as the market does not accept current numbers.
FDM Price at posting:
27.5¢ Sentiment: Buy Disclosure: Held
