I’ll copy and paste some points I recently raised as it is better to put them all in this point – First I’ll talk about some points which @jackarooz already raised here
1) As Jack said, nothing has been voted on by anyone as yet – Very valid point as BB does indeed have his fair share of supporters too. I am one of them and was originally very impressed in my very first meeting with Brad. I’m pretty sure that a lot of holders who have met Brad were impressed with him, and are only disappointed now that the share price has collapsed
2) As Jack said, BB has indeed ticked off a lot of boxes and does work incredibly hard. @earlyrise also suggested that in a post today – I do believe that BB is putting in best effort since long. I’m not sure we will find anyone who puts in a similar effort of hard work needed at this stage.
3) As Jack said, he is the underdog without any silver spoon – Another of the reasons why many of us holders want to support him. I admit this might be slightly emotional and idealistic behavior on the part of many of us. But I still like to try to do the right thing. And I still want to support the underdog who is putting in this best effort
4) As Jack said, this is not the time to talk about changes and we are near to the DFS which is the tool to finally assist BB to come good – Valid point again. It is easy to say replace him, replace him….the point is with who? BB has years of experience with TON, and is fully familiar with TON. Does it really make any sense to have a new MD and CEO at this critical juncture, who will then have to start to familiarise himself with TON?
5) Again as Jack said, shareholder decisions should not be based on emotions provoked by non holders, but think logically for themselves.
Now some points I raised some days back, and best posted in this comment to get the overall picture – I’ll add some more info to them and maybe some more points later -
6) Management’s decisions right now are in the longer term interest of the company. Unfortunately many shareholders want instant results.
7) DFS expansion to include JV, Ancuabe, P66 etc. might be a little short term pain but definitely big gain later, and a great long term move.
I’ve explained in my very first point in link above that the delay could make price languish till DFS comes out, and how the uncertainty and change of plans was negative (2nd point).But apart from that, the DFS delay is needed for the longer term sustainability of the company. This capital raise addresses major stuff like expanded DFS, definition of Ancuabe resource, etc.
8) Should the capital raise have been at a higher price. Sure. And perhaps, the management wanted that but it just did not happen. So many positive announcements over the last few months should have led to a much higher price but it just did not happen. I think the news of potential capital raise would already have leaked out to instos earlier, and hence none of our announcements led to a sustainable price rise. I’m not really sure how any of us could have handled the situation differently. Could any of us in BB’s place, ensured that CR could have been at a higher price? I don’t think so.
9) Again, it might be argued that TON could have had a bigger raising in May, in the 30s. But honestly, at that point too, people would have complained about dilution. And that is a fact again. Dilution is going to happen in future too. TON is focusing on key areas right now to build a longer term great company. So, personally I’m hoping that we do indeed get the full 11 million this time around, as cash is king for me. I’ve explained (point 8 in link below) how even with full rights this time around, diluted market cap at 15 cents with all new shares and options too would be AUD 80 million. So we are still cheap as peers are at AUD 200 million and AUD 850 million, etc. http://hotcopper.com.au/threads/ann...ement-offer.2637200/page-221?post_id=16391012
10) I mentioned some days back that "I can’t help but notice that TON long termers are happy with management’s strategy while non holders are more concerned about getting management fired and that should say something and that was the reason why I’m expressly mentioning my support for the management even more – each and every member of management."
Perhaps I was wrong in some ways because yes, while some long termers support management, many long termers including substantial shareholders do seem upset with management. I do believe that concerns of shareholders, and especially the substantial holders should be addressed by the management, and views of substantial shareholders on any potential improvements should be duly respected by management. This should be taken seriously by management and IMO, management would do well to contact the 3 substantial shareholders who expressed concerns yesterday and have a chat with them, and try to address their concerns, to whatever extent possible.
11) I do believe that cash management should have been handled better. I’ve been pointing out so much of the importance of funding, cash management, etc. since the start (my very first analysis in fact), and it is deeply upsetting for me that competing companies have paid more attention to my words and gone ahead and ensured that they are fully cashed up, while the company, TON that I support ignored my warnings completely.
I’ve mentioned what I consider key issues that will make or break TON. Unfortunately, so far, TON has not been faring well on those key issues. http://hotcopper.com.au/threads/ann...ement-offer.2637200/page-257?post_id=16396875 http://hotcopper.com.au/threads/ton-chart.2578170/page-214?post_id=16311694
12) It is disturbing that each major capital raise is at smaller prices – last year at something like 50 cents or somewhere there I think, then at around 35 cents at May and now 15 cents this time around. Obviously this needs to be worked on.
13) Like I said recently, I would hope that the management take up their rights too in this capital raising as it would send a very strong positive message to the market, and is the best answer to their critics who claim they are out for freebies.
14) I have zero problems with the new performance rights as they are more in terms of shares in lieu of cash outflow than “performance rights” and the term is really not very appropriate. Simply cannot see any material issue with it. http://hotcopper.com.au/threads/performance-rights.2629817/?post_id=16299914
15) I think the concern of many shareholders is the old performance rights that were issued something like 15 months back. I don’t have so much of a problem with that considering that TON has indeed come a long way, ticking many boxes in the last 15 months. Also, I don’t know the circumstances which made shareholders agree to it last year, but there must have been some valid reasons.
Having said that, I can fully understand why many shareholders must be upset because the share price simply hasn’t performed. So obviously many shareholders would be incredibly upset about this, and perhaps management should understand their frustrations. The best way for management to address this issue is by taking up their rights in this capital raising to the fullest. At least then, many shareholders would not grudge the management any of those performance rights. http://hotcopper.com.au/threads/ann-quarterly-cashflow-report.2629375/page-26?post_id=16298370
I’m not convinced that we need a graphite specialist as a director. Graphite specialists can be hired as employees if need be. We do have people with solid mining experience like Chris (FMG) who knows how to bring up a company from start and that should be enough. Also we have Alf, and that should be enough. Broader macro side and Moz issues are well covered by Paula. Jenks is a great cornerstone investor and brings solid support in the form of himself and the Wolves. And Brad has been managing the day to day affairs well enough. We have come quite far in terms of so many boxes ticked.
17) As per recent SYR report, James Askew, the Chairman of SYR is apparently also the Chairman of OceanaGold and Non exec Director of Evolution Mining. Many of you guys who are only in graphite shares might not be aware but these are 2 of the most well known and respected ASX gold companies. This definitely brings solid institutional focus on the company. It might be good if we are to similarly attract someone who is a current director with some well run companies. Of course, this would mean more costs though with an additional non exec director.
18) Again, SYR really scores over TON by having Tolga who has a solid understanding of the stock market. Unfortunately for TON, the game is consistently being lost in the stock market, and perhaps a reputed name from the financial circles might also be good for TON as an additional director. But once again, this would mean additional costs. Ideally, someone who fits both of the above criteria would be a good addition to the board, as maybe a non executive director (that would also cut costs).
19) Conclusion
I believe that shareholders should give Brad a chance, and Brad does have my support for sure. We’ve mainly lost in the stock market and many shareholders believe that the price has been played around with, from the start. True, that is no excuse as all shares are played around with. Just this week, one of Australia’s leading law firms lost 75% of its share value showing how vicious the market can be. I think it is a bit cruel to target Brad or actually blame management for our share price being played with. It is like saying that someone who has been robbed should be punished further and they should now go to jail for being robbed.
We are at a critical juncture right now and management need to approach the situation with a cool head. I think shareholders would do well to extend their full support to management right now, so that management can handle the upcoming hurdles better, and with a cooler head, without having to fear if each day will be their last.
At the same time, management IMO needs to chat with the 3 substantial holders and try to address their concerns.
It is a difficult time for the company no doubt. Shareholder concerns about pouring in further money are completely understandable. I have those concerns too because honestly, shareholders can’t keep just pumping in more and more money, despite what I believe are exceptional fundamentals. I'll highlight again that cash is where the battle will be won or lost.
Like I’ve said before, I think if management take up their rights in the capital raising, it could calm down a lot of shareholders.
Good weekend to all. Cheers
TON Price at posting:
14.0¢ Sentiment: None Disclosure: Held
(20min delay)