Need a deal.

I have spent sometime looking over the market announcements and comments on this board and I would say that in my experience and under the current environment with the companies history of hopeful failures (sorry but that is the best term I can come up with) the share price is fairly valued.

First of all, the deal with Timis is considered very high risk albeit with high reward. Timis history of pumping up deals that fall through and corruption makes the 300 - 500 million potential about the same confidence as  buying a lottery ticket for the Saturday night jackpot. Don't start shopping for the Ferrari yet.

Next, the current deal for Marampa basically pays for operations of the company for the next few years. If we get the royalties that are promised they will go straight into the recently inflated pay packets of the directors and some exploration. The cut in staffing recently was to bring costs closer to the potential royalty revenue.

Simple version: The estimated quarter royalty revenue (at best) $3mill with the predicted costs of admin and exploration $4.4 million. Still a shortfall of $1.4 mill and no dividends for shareholders. We need more revenue to pay the operational bills.

Speaking of royalties, I am pleased that they are coming through, that they are being acknowledged to the market and that the ship movements we are seeing are royalty paying. I was expecting that the first payment was going to be short (not sure it should be $2.6 mill short but the process is real at least) due to start up of mining post paper work.

Waiting on paper work! How many stages does the company need to get through before they have a de-risked asset in Marampa for mining or sale? I don't know whether this is intentionally vague as a stalling tactic but for the past two years Marampa has been waiting on something to be approved (Lease, Mining Agreements, Transport Agreements). Can some of them not be done in parallel? The feeling now is that Marampa will not be mined through CFE in my life time.

CFE Road to Recovery: My Opinion

Sell Marampa and royalty rights for $200+ million. CFE is not in the position to mine itself and Marampa is better value as a part of package with Timis selling the ex-London Mining assets and whatever they can get off the AML guys in terms of Infrastructure use. Some big company could scoop the lot up for a relative bargain on both ends.
Why 200+ million? $50M to cover the expected royalties from the LM deal and $150M as a 50% discount on the royalty potential in exchange for cash.  (Timis still owes $8M on top)

Dividends + Reinvestment: Pay out the dividends with a reinvestment plan as a shareholder option. Need to put some confidence back into CFE and give power back to its shareholders. Separate the sale of Marampa money into investment cash fund and the rest return to shareholders with the option for the shareholders to reinvest directly into the investment cash fund.
This would give CFE the ability to invest in non-IO assets, give the shareholders some say in the overall direction.

Directors Renumeration: In light of the recent pay increases, poor share-price and lack of confience, the current pay packets for the directors is not equitable to their contribution or success. (This is undeniable, they are over paid for performance). Move to performance based package for all senior management that is tied directly to company performance metrics, share-price and guaranteed cash flow are a couple of the KPIs that spring to mind.

Diversify the Portfolio: In this depressed market there are number of potential assets available for purchase, funds from the sale of Marampa would go along way into long term investments in these businesses. This is where Tony Sages is a wizard but with out the available fund he is a wizard with out his wand.

Market the Current Portfolio: Very little is known about the other assets that CFE owns, there some good value in the projects and ownership outside of Marampa but every announcement ties the fate of CFE into this one (albeit big) asset. The sum of the others and potential needs to be reviewed.

Anyway, sorry for boring you all. I wanted to share my view on the direction of CFE and look to realising its potential over the next 12 months. Happy to hear other opinions on the matter.