rudders you have to be kidding me right? Just look at the chart...

rudders you have to be kidding me right? Just look at the chart mate. No downramp necessary! Pretty clear observation. Also I have stated facts or suggested some questions to provoke debate. NTA can be a decent investment yardstick for a going concern but trying to point out that you need to be careful taking to much comfort from the figure in the event a business goes bust (or conducts a dilutive capital raising in the case of a NTA per share), as the values on the asset side of the equations can fall dramatically however the liability side stays the same.

Mav777, I am not sure that it is right to say that debt is low. VMG has absolutely burned through the cash since June 30 last year and as a result net debt has gone up materially (more than 5%). Net debt on my quick calcs is sitting at just under 30 million (including hire purchase liabilities). Sure measured against current equity it doesnt look too bad however if accumulated losses snowball then that ratio is going to look a lot more unhealthy in future. As measured against its market cap it looks downright terrible, which sure doesnt speak about solvency too much but does indicate how terribly dilutive a capital raise would be if its conducted. Another thing to think about is the possibility of debt increasing. As I said the company has burned through cash recently and will continue to do so - reduced revenue will have a material impact on cashflows clearly - will the company need to access overdraft facilities to finance working capital requirements if new contracts are won. They key is obviously landing some more material contracts. If they dont the company will have to right size and that will lead to even more costs. Recent April update suggested 170 mill work in hand - thats less than 4 months work when measured against the revenue for FY 2010 (sure contracts maybe longer so could be more than 4 months work but that on its own shouldnt provide too much comfort - point is work in hand is low). Dont underestimate how quickly things can change when your creditors lose patience. I am not sure of the debt profile (in terms of payment) however we have seen from the recent update that the company has already started breaching its covenants so who knows as the attitude of bankers/banks can turn on a dime (I should know as I work for one). Even if the bankers did lose patience then there are some decent funds on the register that would probably prefer to kick in some extra capital rather than see their significant (when they first invested) investments wiped out, however as I said looking at net debt vs current market cap that is going to be destructively dilutive. The key to company salvation is management securing further work. However that doesnt seem to be happening and we are in the midst of a once in a generation capital expenditure boom that should result in companies like VMG behaving like pigs in mud - yet they can't secure further work. Then you look at some of the revolving doors in management and you start to wonder.

All that said, IF the company can secure some decent contract wins and get anywhere near recent EPS figures then the share price could turn sharply. I am thinking of RCR as an example. In the height of the GFC it was battered down to .30 ish and is now 1.65 (plently of other mining servicers exhibited the same pattern as you are probably fully aware). Until then (if it happens)I would expect the share price to drift further south.

I might look at a punt at the end of June (and given tax loss selling and in the absence of a positive market update would expect to be sub 15 cents) but only a small amount of capital as I do think the risks are high.

Good luck to all holders.