I'll preface this post with the usual caveats - DYOR, and none of what I say is intended as advice.
I have just recently drawn down on all positions I hold with Tombola. This is after almost four years of holding, starting before the crazy ride to 0.12+ and throughout the long drain afterwards. Over that time I've accumulated along the way, managing to average down quite nicely. I think the current price is a good return for me personally when weighing up what I see as serious risks. These are the risks that I considered to be too much, happy for others to discuss, would love to hear feedback:
No crusher, no way to process oreAt no point during the entire time I've held Ausmex/Tombola have I ever seen any mention of a crusher. It's not listed in their current plan towards production, which seems very strange. The plan all along was for the ore to be processed at Round Oak, which has failed to register even a mention on announcements for over a year, which leaves investors guessing as to how the ore will be processed.
Wildly dynamic timelines, carrots on sticksThe announcements from Ausmex/Tombola over the years have always promised that things are just around the corner. We get to the corner, it's the next corner, and the next, and the next. Delays happen, and timelines in any business are usually optimistic, but we're talking delays of years now with long periods of seeming inactivity. Gold was meant to be poured before the last two Christmas' I believe, then there was promise of Q1 or Q2 this year, now it's Q3.
Incongruent timelinesThis one comes from the AGM Investor Presentation from April:
The processing plant is listed as completing in Q3. The first gold pour is listed as Early Q3. Why is the processing plant not listed as Early Q3? Surely the processing plant requires completion before the first gold pour.
Drilling the same holes over and overThe company has a habit of drilling new holes very close to old holes with decent grades, in effect reproducing similar results without actually improving the resource. This has happened in multiple locations, and appears to be a pump and dump tactic. It hasn't happened just once or twice, it's a recurring pattern, and it's still happening now with the new board.
Burra and "The Monster" orebodyHistorically Burra has produced a lot of copper, with the orebody being dubbed "The Monster". There is no doubting that this is an important and valuable orebody that is yet to pinch out. The Burra prospect gets rolled out by Ausmex/Tombola every year or so to drum up interest, as it did in the April Investor Presentation. How many of you noticed this little gem buried as a footnote on page 15 though? This rings gigantic alarm bells for me:
I'd love to hear the feedback from others about these risks. Tombola remains on my watchlist, as I think they are a decent prospect, but I'd like to see those above risks addressed before I'd feel comfortable backing them again.
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