Patience, page-6

My opinion is this.

First wait for the new production plan. No way to know how it will turn out. Martin Purvis said a lot of stuff maybe bearish for that plan but then again maybe he did a lot to bring forward Troy over the longer term and had no chance to clean up the problems Benson left behind. And he will stay until end of May. Maybe he is just cautious because of the starting rain season and because he does not want to spend time in Guyana. New drill data incorporated into plan could be positive.

Until end of May we have to assume the worst, and the theoretical worst scenario is
1. Smarts 3 and other high grade parts not mined in time, money runs out in 3-6 months time, large capital raise needed and old shareholders keep only 40% of company
2. Problems with Smarts reserve calculation. New reserve only 3.0 g/t and for the Hicks/Smarts blend 2.8 g/t. The end of Karouni grand plans, most of the reserve vanishes. But still for the LOM 21k ounces quarterly at $950 AISC for 3 years.

The share price calculation is easy. 250k ounces at $272 margin = A$90m.
$30m needed in addition to current cash for debt payback and hedge book, so A$60m. Diluted to 40% = A$24m.
Then we have Goldstar, very interesting project with the latest drill results and worth to Troy a lot. But to others without a plant maybe only $10m. Troy will get more than A$20m for Goldstar + plant if they sell after Karouni is mined. A$20m * 40% = A$8m.
Then we have losses carried forward. A$180m. Maybe 50% of than can be turned to money via reverse takeover or something and of course only 30% tax rate. Again diluted to 40%: A$180m * 50% * 30% * 40% = A$11m

A$24m + A$8m + A$11m = A$43m = 9.5 cents per share.

So we already have reached rock bottom price for the worst case scenario. Dilution 1:2.5 and loss of most of Karouni reserves seems to be baked into the price.

Given those figures it makes no sense to sell but just to wait. The share price can always go lower, but chances are if you try to get back money via investment returns you will not lose here.

Upside is very high. Depends on Goldstar and how much more drilling they can get there. But why risk anything before we know the details until end of May?
Then again if they can mine the 30-40k ounces at Smarts 3 in time (3-5 months) the cash problems will be solved in 1 or 2 quarters.