Firms make plans and investors invest in those plans in good faith. As OBM by the end of CY2021 had only operated for a little more than 12 months, the DFS is the appropriate yardstick to gauge performance and to determine why shareholders selling today are having to take a material haircut.
It may be appropriate in the future to measure against an updated plan but that is something yet to play out. If one no longer believes that the DFS is achievable then that is saying something about management behaviour. Is it reasonable to conclude that the responsible competent person and/or management may have been overly optimistic when assessing the prospective grades? Why would they do that? Will it become a situation that warrants a formal investigation of sorts if this level of performance persists?
The DFS was based on resources. In any event, the actual grades to end CY2020 were also materially lower than reserve.
The wrap distinguishes between and comments on mined grade and head grade. The figures in the wrap refers to the period from the start of production till the end of CY2021. July 2020 info was in calendar years, AGM info was in financial years. If the future grades based on current experience will be 70% of DFS (e.g. Missouri being your expectation of 2.34 g/t v DFS 3.37 g/t) then full production may not be sufficient to restore value for shareholders.
Good luck to us all.
OBM Price at posting:
5.3¢ Sentiment: Hold Disclosure: Held
(20min delay)