So what do people think about the recent announcement and the price action today. Obviously NGX took a hiding in fridays London trading which effected todays ASX trading.
But much of this bad news from the most recent announcement has already been telegraphed in large and revealed to the market by some of the recent announcements they have released. In february they downgraded there 2011 fiscal year production forecast to 65k which has now been further downgraded to a 55-60k figure. Its not a massive drop yet the price has sold off 41% just today.
Obviously this run of bad form has effected the markets confidence in the company and whether they will be able to achieve anywhere near their forecast FY12 production figures of 120k that if met will also help to bring down cash costs per ounce. Also maybe people will be concerned there may be a 3rd capital raising on the way.
I have previously held NGX in 2009 from around the 70c to $1 mark at a time when confidence levels were certainly a lot higher. They have had a bad run in the last 6 months, but I am still thinking this afternoons sp levels are a bit of an over-reaction... If my calculations are correct the market cap will now sit at 68m after being 117m at the close on friday. Its a fair hair cut.
Time will tell. Bought in at 31c cents today and I guess we'll have to wait and see how it travels from here. Commiserations to LT holders but I am hoping this has opened up an opportunity for others to buy in at these levels.
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